The market is in a state of volatility and adjustment. Let’s first review what happened in the crypto circle over the past two days?
• $NVDA is hitting new highs. Nvidia is doing a 10:1 stock split on June 7. If it can upend Apple’s market cap, money from memes could be redirected to AI. $RNDR
• Coinbase to list $BONK, $FLOKI and $SHIB on its futures trading platform on May 30 (ICYMI)
• $BNB - Binance will start $LISTA farming on Binance Megadrop on May 30. Users can lock BNB to farm LISTA tokens until June 19.
• $ENS - Ethereum Name Service has announced ENS v2, a proposal to extend the ENS protocol to Layer 2.
• $FTM – Fantom announced a partnership with Google Cloud to launch a program for developers to build the next generation of dApps.
• $LADYS - DWF Labs CEO Andrei Grachev revealed plans to invest in Meme Coin. Following the tweet, DWF Labs transferred $5 million to the developers of LADYS.
• $MAGIC - Treasure CEO Karelvuong revealed the release of a new FOCG game. Details will be announced soon.
• $SAGA – Saga announced this week the launch of multiple pilot games on the Saga Chain.
• $STRK - The Starknet Foundation announced the launch of the Catalyst Ecosystem Program and provided 20 million STRK as funding.
• According to Ryan Watkins, modular narratives are ready for a massive comeback. $TIA
• $ZK - Polyhedra Network announced that $ZK Staking will be launched on June 10th.
• $GAL – Galxe will make a special announcement tomorrow at 9pm CDT, likely related to a rebrand.
There are risks when it goes up and opportunities when it goes down. Although the Meme sector continues to reach new highs, blindly following the trend can easily lead to danger. Here are 10 tips you need to know before trading Meme:
1. Price Action is King
Since Meme is an attention-driven economy, PA and transaction volume are key to ongoing price discovery.
A good meme should have a history of high volume and high transaction counts to show real attention.
2. Use support and resistance levels to enter the market
No matter what you trade, you should be familiar with support and resistance levels.
Your Meme can’t go up forever, look for good entry points like S/R flips to tip the balance in your favor.
3. Fibonacci Retracement
Fibonacci retracements are the most useful tool for finding entries into Meme declines. Here is a brief guide on how I use it.
If a project has strong momentum and the decline is quickly absorbed, you may only need to enter in the red and yellow areas.
If you are looking for an entry point into a project that is being sold off heavily, the best spot is usually located in the blue area or just below it.
4. Position size
Position size can make or break your strategy, I determine position size based on the market cap of the project.
For Meme projects, I usually invest 1 ETH into 1M market cap, and the total position is limited to 2-3 ETH. (Depending on liquidity)
If you take too small a position in a large project, you will have to wait longer to make a profit, which increases your overall risk.
5. Record transactions
Always keep a journal. It’s the best way to learn quickly and improve without relying on intuition. You need data to understand your tendencies and where you’re going wrong.
6. Liquidity to Market Cap Ratio
Liquidity determines how much money can actually be withdrawn from an asset. Since LPs typically own half of each asset, the actual amount that can be taken out of the pool may be much smaller than the market cap would indicate.
Small liquidity pools lead to higher volatility and vice versa. If you invest heavily in a small liquidity pool, you will suffer losses due to price impact.
7. Independent thinking and analytical skills
There are good times and bad times to trade memes. The reason many people end up losing money is that they keep trading the same way even though the situation has changed.
Due to market liquidity, consolidation after a market surge is usually the best time for memes.
Under low volatility conditions, memes become more difficult. People are PVPing more and more, and it becomes harder to drive prices up.
8. Stay away from the leaderboard
I personally have a rule to only check the chart once an hour. The more often you look at the price, the more emotional you become and you will eventually compromise your position because of those emotions.
It's not worth it, it's better to calm down things instead of staring at charts all day.
9. Understand loss of control
In gaming, being out of control is the state of playing worse during a losing streak.
The same is true in trading, when people keep losing money, they subconsciously change their behavior, which puts them at a greater disadvantage. For some, it is to increase risk to compensate for the losses.
When you're on a losing streak, it's time to stop playing for a while and refresh yourself.
10. Learn to observe
By far the most important skill you need is the ability to observe without buying anything. There are always opportunities in memes, but if you feel the need to constantly trade, then you’re not trading anymore.
Learn to observe and spot patterns that you can exploit. Sometimes you won't have an advantage, and that's okay.
Remember, if you view your position as a long-term investment, a market drop should be viewed as a gift. It provides an opportunity to buy more tokens.
Finally, it is crucial to have a strategy before making any purchases, and never invest all of your money.
I hope this topic is helpful to you. 🙏Thank you for your likes and support👍