As traders, it can be tough to tell whether we're witnessing a genuine bull run or just another "pump and dump" situation. Here are a few key signs to watch out for:
1. Volume and Price Action: A true bull run is usually backed by consistent, steady trading volume. If you see a sharp price increase without much volume, or if the price drops just as fast, it could be a pump and dump.
2. Market Sentiment and News: Bull runs often come with positive news or market shifts that build momentum over time. A price spike without significant developments or industry news might be a red flag.
3. Duration of the Move: Bull runs tend to last for weeks or months, showing sustained upward movement. Pumps, on the other hand, are often quick bursts of excitement followed by a sudden crash.
4. Whale Activity: Watch out for large holders (whales) making big moves. A pump and dump usually involves whales pushing the price up and then selling off, while a bull run sees more widespread participation from both retail and institutional investors.
As long-term traders, it’s crucial to stay grounded and stick to our strategies during volatile times. If you're uncertain about the current market, patience might be your best ally until the picture clears up.
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