How to Identify "Pump and Dump" and "Dumping" Traps by Sharks in Crypto

Eight years of navigating the crypto market has taught me a very costly lesson: not being able to distinguish between shakeouts and dumps will sooner or later make you the one paying the market’s tuition. Last week, a brother hurriedly messaged me: “This coin has dropped more than 30%, should I buy more to average down?” I only glanced at the chart once and got chills down my spine. That wasn’t a shakeout — that was a clear dump. But unfortunately, he still jumped in to buy the dip. The result is predictable: his entire capital got stuck. I’ve seen too many situations like this. In this trap-filled crypto market, correctly identifying a shakeout or a dump determines whether you survive or get eliminated. Today, I will share my entire practical experience to help you see the true nature behind these price drops. Shakeout vs. Dump: Completely Different Fundamentals A shakeout is an action preparing for an uptrend. Whales intentionally cause price swings, slight dips, or sideways movements to pressure weak-minded traders to sell. Their goal is to accumulate more coins at low prices, not to give up. Imagine a shakeout like cleaning the runway before an airplane takes off. In contrast, a dump is when whales have eaten enough and start distributing coins to the market. At this point, every rebound is just a trap to lure new traders into holding the bag. I once analyzed a project: Price drops but volume decreases When rebounding, volume increases steadily and strongly Important support zones are always maintained That’s true shakeout. If these factors are missing, it’s more likely a dump. Three Key Signals to Recognize Instantly

1. Trading Volume Never Lies Shakeout: price drops but volume is low, price rises with high volume → Whales don’t want to sell cheaply, only scare retail into panic selling Dump: price drops with large volume, rebounds with weak volume → Every dip is a whale selling, rebounds just to lure new buyers If you only look at the price and ignore volume, you’re blinding yourself.
2. Battles at Critical Price Zones During a shakeout, you will see: Price struggles to break strong support levels Important moving averages are still protected Because these are price zones linked to whale costs. Conversely, during a dump: Support levels are continuously broken Lower lows than previous lows Price acts like bulldozers crushing all supports Rebounds at this stage are weak and short-lived.
3. Price Oscillation Rhythm Shakeout: slow, prolonged decline; quick and decisive rise This rhythm discourages retail traders during declines and causes missed opportunities during rebounds. Dump: very rapid, vertical decline; slow, weak rebounds This is the perfect trap for those who like to “catch the bottom.” Practical Response Strategies Understanding the signals is one thing, taking the right action is what determines the outcome. Patience is the strongest weapon When prices fluctuate sharply, ask yourself: Is the market trying to make me buy or make me sell? Capital management is essential for survival I’ve never gone all-in. Always keep some cash to maneuver when wrong. Always have clear stop-loss points Whether it’s a shakeout or a dump, if the scenario is wrong — cut losses without hesitation. Preserving capital is more important than any profit. Final Message from Someone Who’s Been There Eight years in crypto, the money I lost to learn this lesson might be more than many newcomers’ capital. But I’ve realized one thing: Emotions are the biggest enemy Discipline is your most loyal friend Whales don’t win because they’re smarter, but because they understand human psychology: fear and greed. The market will not spare ignorance. If you don’t understand the language of charts, you can only learn with real money. Keep getting harvested, or learn to distinguish and stand with those who understand the game — the choice is yours. I once wandered in darkness for a long time. Now, I have a light in my hand. I hope this article helps you light a candle for yourself, so the path ahead in crypto is less dark. Learning is always your greatest asset.