Dump

A dump is what traders call it when the market for a coin gets flooded with sell orders in a short window, pushing the price down fast. It is less about the size of the drop than the speed and the sudden imbalance of supply over demand: a slow, orderly decline over weeks is usually described as a correction, while a dump happens in minutes or hours and is typically paired with a spike in trading volume and volatility.

Dumps have a handful of recurring triggers. A single large holder, or whale, can move a big enough position to an exchange and sell it, overwhelming the order book faster than buyers can absorb it. Negative news, a regulatory crackdown, an exchange hack, or a stablecoin losing its peg can spark panic selling across many wallets at once. Leverage makes it worse: when a price starts falling, traders using borrowed funds get liquidated, and their forced selling pushes the price down further, triggering more liquidations in a cascading chain.

Dumps are also engineered deliberately. In a pump and dump, insiders or coordinated groups first buy up a low-liquidity token and hype it to attract retail buyers, then dump their holdings once the price is inflated, leaving latecomers holding losses. Thinly traded or highly concentrated tokens are especially vulnerable, since even one wallet exiting can crash the price by double-digit percentages within hours.