A token dump occurs when a substantial holder or a collective of holders rapidly sells a significant quantity of a particular cryptocurrency token, often precipitating a sharp and sudden decline in its market price. This action can be executed by early investors, project developers, or large individual holders, resulting in considerable losses for other market participants. It frequently signals market manipulation or a loss of confidence. Such events impact market stability.
Context
Token dumps are frequently reported in cryptocurrency news, particularly following initial coin offerings (ICOs) or during periods of heightened market volatility. These events often lead to accusations of “rug pulls” or insider trading, severely eroding investor trust in a project. Analysts closely monitor large token movements to anticipate potential dumps and assess the health and integrity of various digital asset markets.
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