How to Spot Crypto Pump-and-Dump Scams - A Trader’s Guide to Staying Safe 24 Mar 2025

How to Spot Crypto Pump-and-Dump Scams: A Trader’s Guide to Staying Safe

The cryptocurrency market promises big wins, but it’s also a hotspot for crypto pump-and-dump scams—schemes where manipulators inflate a coin’s price before crashing it for profit. These scams exploit hype, leaving traders with losses while scammers cash out. With the right know-how, you can spot crypto pump-and-dump scams before they sting.

In this guide, we’ll explore how these scams work, key warning signs, and how Crypto Statto’s Big Whale Report helps you detect crypto price manipulation in real time.

Famous Pump and Dumps from charts

Libra Coin

Hex Pump and Dump?

What Are Crypto Pump-and-Dump Scams?

Crypto pump-and-dump scams target low-market-cap coins, where a group—often whales or insiders—buys heavily, then pumps the price with hype. Retail traders pile in, driving up value, only for the group to dump their stash, tanking the coin. Think Bitconnect in 2017: it soared from $0.17 to $400 on fake promises, then crashed when insiders bailed, a textbook pump-and-dump crypto disaster.

Telltale Signs of Crypto Pump-and-Dump Scams

• Sudden Price Spikes: Gains of 50%-500% in hours, no news attached.

• Volume Explosions: A quiet token’s trading volume jumps from $10K to $1M overnight.

• Social Media Crypto Scams: Shills flood X, Telegram, and Discord with buzz.

• Fake Hype: Bogus partnership claims or exchange listing rumors.

• Low-Cap Targets: Illiquid coins under $1M market cap are prime prey.

How to Spot Crypto Pump-and-Dump Scams Before They Hit

Avoiding crypto scams starts with vigilance. Here’s how to detect pump-and-dump crypto schemes early:

1. Track Unusual Price and Volume Spikes

A coin spiking 200% with no fundamentals—like a new feature or adoption—is a red flag for crypto price manipulation. Organic growth builds slowly; pumps don’t.

Detection Tip:
Crypto Statto’s Big Whale Report flags hourly price and volume surges (e.g., 300% jumps), letting you spot crypto pump-and-dump scams before the dump phase kicks in.

2. Inspect Order Books for Spoofing

Manipulators spoof demand with fake buy orders—say, 10,000 tokens at $1—canceled at the last second. Thin sell-side depth hints at an impending dump.

Warning Sign:
Massive buy walls vanish fast. Check exchanges or tools like TradingView for clues.

3. Watch for Social Media Crypto Scams

Pump groups weaponize FOMO with lines like:

• “Next 100x coin—buy now!”

• “Big news incoming!”

• “Pumping to $10, hop on!”

X posts from paid influencers or Telegram bots amplify this. Search “coin name + pump” on social platforms—if it’s a chorus of clones, it’s a scam.

4. Analyze Whale Activity Tracking

On-chain data exposes crypto pump-and-dump scams. If 3 wallets hold 80% of a token and start buying, then dump at the peak, it’s no coincidence.

How to Check:
Use Etherscan or BSCScan for wallet moves. Crypto Statto’s Big Whale Report automates whale activity tracking, spotting bulk buys or sells instantly.

5. Question New Exchange Listings

Shady exchanges list low-liquidity coins ripe for manipulation. A token on one obscure platform spiking post-listing screams pump-and-dump crypto.

Red Flag:
Volume leaps from $5K to $500K on a no-name exchange. Verify via CoinMarketCap.

6. Vet Project Fundamentals

Real coins have active GitHubs and clear use cases. Scammy ones sport vague sites and no dev history—perfect for crypto pump-and-dump scams.

Quick Check:
Search “project name + scam” for reviews. No substance? Run.

Not All Big Candles Are Pump-and-Dumps

Big candles can spark suspicion, but they’re not always crypto pump-and-dump scams. Sometimes a coin catches genuine attention—say, a viral tweet or a real exchange listing—driving authentic buying pressure. The trick? Look for sustained new levels post-spike.

How to Tell:

• Hockey-Stick Shape: A sharp upward “blade” (big candle) after a flat “handle” (low prices) might be legit if prices stabilize around that new high, forming support. For instance, a coin jumps from $0.01 to $0.05 on news, then holds $0.04-$0.05 with steady volume—that’s buying, not dumping.

• Pump Clue: If the candle spikes to $0.05 then crashes to $0.01 with fading volume, it’s a dump. No support, no staying power.

• TradingView Check: Use the Volume Profile to see if trades cluster at the new level—sustained buying builds a base; pumps don’t.

Best Tools to Detect Crypto Pumps: Big Whale Report

Crypto Statto’s Big Whale Report

Your shield against crypto pump-and-dump scams. It tracks market anomalies live, giving you an edge over manipulators.

Features for Scam Detection:

• Hourly Volume Alerts: Catches 200%+ surges tied to pumps.

• Whale Activity Tracking: Flags big transactions signaling manipulation.

• Price Anomaly Alerts: Highlights spikes without legit drivers.

• Coin-Specific Data: Pinpoints risky tokens fast.

Picture this: a coin leaps 150% in 30 minutes, volume up 400%. The Big Whale Report shows a whale dumping 50% of supply. You skip the trap while others buy the peak.

TradingView for Volume Analysis

TradingView complements this with visual power. To spot big volume before a big candle:

• Volume Indicator: Add it to see if heavy trading precedes a price surge.

• Historical Check: Look back—low prices with rising volume often foreshadow pumps.

• Volume Profile: Use Visible Range Volume Profile (Premium feature) to see where volume clusters—high volume at low prices hints at accumulation.

Case Study: A 2023 BSC token surged 600% in a day, hyped as “Shiba Inu 2.0.” TradingView showed $100K volume at $0.001 over a week, then a 300% candle. Whales pumped from $0.001 to $0.006, dumping to $0.0002—visible in advance with volume spikes.

Case Study: 2023 BSC Pump

A Binance Smart Chain token surged 600% in a day, billed as “Shiba Inu 2.0.” On-chain data revealed three wallets—85% of supply—pumped it from $0.001 to $0.006, then dumped to $0.0002. Tools like Big Whale Report could’ve flagged this crypto scam early via volume and whale alerts.

Owning Pump and Dumps - understanding there are many flavours of Pump and Dumps that you may not be aware of

Redefining what a pump and dump is can help you to recognise rug-pulls. One definition we can propose is - A Pump and Dump is over-expectation on the part of the market and its participants prompting individuals to over-invest in an asset, only to see if fall dramatically.

We could borrow too much to buy a house, only to see the housing market collapse, having been told the market is "booming". We could buy a stock on the promise of upside only to find out that sector has a downturn.

The psychology of scams

The University of Exeter conducted a relevant study in 2009 titled "The Psychology of Scams: Provoking and Committing Errors of Judgement", commissioned by the UK Office of Fair Trading. This study explored why people fall for scams and noted that shame and embarrassment often prevent victims from reporting or admitting they’ve been deceived.

Key Outcomes of the Exeter Study

1. Psychological Vulnerabilities Identified

The study pinpointed specific cognitive and emotional factors that make individuals susceptible to scams:

• Visceral Triggers: Scams exploit strong emotions like greed ("win big now"), fear ("act or lose everything"), or excitement, overriding rational judgment. For example, a promise of quick riches triggers a "want it now" response, short-circuiting skepticism.
• Trust and Authority: People are more likely to fall for scams presented by seemingly credible sources (e.g., fake officials or polished websites), leveraging the "obedience to authority" principle.
• Errors of Judgement: Victims often misjudge probabilities (e.g., overestimating the likelihood of a scam being legitimate) or fall into "scarcity traps" (e.g., "limited time offer"), clouding decision-making.
• Background Knowledge Myth: Even educated or experienced individuals were vulnerable, debunking the idea that only the naive get scammed. Expertise in one area didn’t protect against unrelated scams.

2. Shame as a Barrier to Reporting

A major finding was the role of shame and embarrassment in underreporting:

• Emotional Fallout: Victims felt "foolish," "humiliated," or "stupid" after realizing they’d been duped, especially if they prided themselves on being savvy.
• Silence Effect: This shame led many to avoid admitting the scam to friends, family, or authorities, reducing reported incidents. The study suggested actual scam prevalence was far higher than statistics showed due to this reluctance.
• Social Perception: Fear of judgment (e.g., "How could you fall for that?") amplified their silence, reinforcing a cycle of non-disclosure.

3. Behavioral Patterns of Victims

• Post-Scam Behavior: Some victims doubled down, investing more to "recover" losses (a sunk cost fallacy), making them repeat targets. Others withdrew entirely from risky opportunities, even legitimate ones.

• Denial: A subset denied being scammed, rationalizing it as a "bad investment" to protect their self-image, further masking the issue.

4. Scammer Tactics Exposed

The study categorized how scammers exploit psychology:

• Framing: Presenting offers in ways that seem irresistible (e.g., "guaranteed returns" vs. "possible risks").
• Social Proof: Fake testimonials or "everyone’s doing it" claims to build trust.
• Time Pressure: Urgency (e.g., "act in 24 hours") to bypass reflection.

5. Practical Implications

• Underreporting Impact: The OFT used this to argue that scam statistics were unreliable, pushing for better public education over reliance on reported data.

• Education Over Punishment: The study recommended teaching people to recognize visceral triggers and question authority, rather than just penalizing scammers, as prevention beats reaction.

• Policy Influence: It informed UK anti-fraud campaigns, emphasizing emotional resilience and scam awareness (e.g., "Think before you click").

Specific Data Points

• Experiment: The researchers ran a mock scam (ethically designed) and found ~30% of participants fell for it, even with warnings, highlighting susceptibility.
• Survey: Interviews with victims confirmed shame as a top reason for not reporting—exact figures weren’t publicized, but qualitative data was strong.

If you do get rug-pulled, acknowledge it and learn from the process.

How to Avoid Crypto Scams: Stay Sharp

Crypto pump-and-dump scams thrive on greed, but you can outsmart them. Doubt every “moonshot” claim—too good to be true usually is. Use data: price trends, volume shifts, and whale activity tracking reveal the truth. With Crypto Statto’s Big Whale Report, you’re not guessing—you’re ahead, dodging pumps while scammers dump on the naive.

Related Articles

• Avoid losing money in the cryptocurrency market from scams
• Should I Buy the Dip in the Crypto Market?
• How Do I Get Into Cryptocurrency?

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