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Study of CEX Listing Effects: A Big Pump Followed by a Bigger Dump
A recent study conducted by CryptoNinjas in collaboration with Storible has uncovered the stark reality behind Centralized Exchange (CEX) listings. While these events have long been touted as a benchmark for crypto projects, promising increased exposure and liquidity, our research reveals that this phenomenon is not only fleeting but also inherently risky.
The findings suggest that CEX listings are marked by an initial surge in price, followed by a precipitous decline. In fact, the study highlights that 98% of Binance-listed tokens experience a post-listing dump, with prices plummeting by an average of 70%. This devastating outcome is mirrored across other exchanges, with even Coinbase, once perceived as more conservative, still witnessing a staggering 89% of tokens experiencing a decline.
These results paint a stark picture: CEX listings are inherently a double-edged sword. While they offer immediate liquidity and exposure, the price action that follows is nothing short of catastrophic for late buyers. The study’s findings underscore the importance of understanding market dynamics behind these listings to avoid the pitfalls of speculative trading.
The data suggests that a Binance listing can generate massive short-term gains, but the aftermath is often brutal for investors who fail to exit or adjust their positions in time. On the other hand, Bybit listings, which attract high speculation, lead to even more extreme price movements, with 92% of tokens experiencing a post-listing dump.
In contrast, Coinbase listings display a weaker initial pump and a less drastic decline, potentially due to a more conservative investor base. However, this does not change the fundamental risk inherent in these events.
The study’s conclusions are clear: CEX listings are often the peak of a token’s price performance, making it crucial for traders to approach these events with caution and skepticism.
Source: http://www.cryptoninjas.net
