Dumping

Understanding Dumping

Dumping refers to a sudden decline in the market caused by external factors, such as global economic turmoil or a specific news story. This phenomenon has been observed in various instances throughout history.

One example of dumping occurs when Bitcoin approaches a halving event. This event historically triggers significant volatility in the market, leading to dumping.

Another notable scenario is when a cryptocurrency’s price repeatedly encounters a resistance level. In May 2018, Bitcoin was on an upward trend, aiming to surpass the $10,000 mark. However, it faced strong rejection around $10,100 and eventually reached $10,200.

At this point, large investors known as whales, who hold substantial amounts of coins, initiated a sell-off just below the $10,000 mark. Consequently, the value of Bitcoin, the world’s most well-known cryptocurrency, experienced a rapid decline within minutes.

It is likely that these whales then re-entered the market to purchase more Bitcoin at a significantly lower price, resulting in substantial profits.