How Can Technical Analysis Indicators Help Identify a Potential Pump and Dump in Progress?
A sudden, massive spike in trading volume accompanied by a sharp, vertical price increase is a primary red flag. The Relative Strength Index (RSI) will often shoot into extremely overbought territory (well above 70).
Additionally, the price action may break away dramatically from moving averages. These indicators suggest a rapid, unnatural influx of capital rather than organic growth, signaling manipulation.