How To Find Pumping Coins In A Bear Market

By Cryptofab | Cointune | 3 Mar 2023

You have all noticed that today crypto market is bearish. One of the reasons is due to the situation of Silvergate. By the way, it could be useful to look at the links they have with USDC and USDT... Just imagine these links are tight, it might create a depeg of one of these stablecoins. Why not shorting them?

Apart from that, some cryptos are bullish. In the top ones, there is ImmutableX (IMX). It is not a surprise, because layer-2s are still trendy, and this one has not pumped a lot yet. You can also have a look at the Optimism ecosystem: OP has already pumped too much, but there are secondary tokens like KWENTA which are still pumping... However, it can be risky to bet on them now, it can be too late. So, how to identify the next ones?

One of the ways to identify them is to look at the tokens listed in the pools on Velodrome Finance. You will find KWENTA, and some other ones... Please Do Your Own Research as everyone says. Another way is to look at the innovation zone of some exchanges. Not the big ones like Binance, but some smaller ones, like Bitget for instance, because small exchanges usually list new tokens before bigger ones. Once you have found the tokens listed there, you'd better have a look at the tokenomics to see if there is a max supply, and what portion of the max supply is currently circulating. For instance, for KWENTA, there is no max supply, so it is risky to invest in this token. One way to check that quickly is to use Coingecko and to toggle on the FDV (Fully Diluted Valuation) which is:

Market capitalization if the max supply of a coin is in circulation. Helping you to understand what the market capitalization will be when reaching max supply.

You can also look at the Mkt Cap/FDV which is:

The proportion of current market capitalization compares to market capitalization when meeting max supply. The closer the Mkt Cap/FDV to 1, the closer the current market capitalization to its fully diluted valuation and vice versa.

So, to keep it simple, if the Mkt Cap/FDV is close to 1, that's good news. Let's take some concrete examples:

  • KWENTA¬†Mkt Cap/FDV is 0.33 and there is no max supply... That's a risky asset.
  • OP Mkt Cap/FDV is 0.05 but there is a max supply... That's good news that there is a max supply but 0.05 is really low, and hence that's risky too.
  • SNX Mkt Cap/FDV is 1 with a max supply. It does not mean there is no risk, but according to this parameter it is less risky than the two other ones.

As mentioned, you will find the next gems by doing your own research. Otherwise, everybody would do the same and it would not work any longer...

Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.

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