Trader Loses Out on $1 Million by Prematurely Selling Solana Memecoin

2024-03-27, 02:58

[TL; DR]

A BOME trader earned $131,000 instead of $1 million for selling the token 24 hours earlier than another price spike.

In January a WIF trader lost over $5.7 million due to slippage.

The high performance of Solana based memecoins helps to maintain SOL’s bullish momentum.

Introduction

The memecoin hype continues during a time when many other cryptocurrencies are trending. Going by the current trend the meme coins are defying all odds to perform well although they do not have utility. Their trading volumes have been increasing to levels similar to those experienced before the 2022 crypto bubble.

Explore Top Solana Meme Coins Coins & Tokens by Market Cap

Since their inception many small investors have been investing in memecoins due to their low prices which, however, can rise significantly within short periods. It is such price volatility which crypto investors capitalize on to generate much profit. Like other cryptocurrencies some memecoins fail to tick in the market.

This article discusses how an investor missed a memecoin windfall by around 24 hours. We shall also look at how Solana based memecoins are performing on the market. Lastly, we will analyze Solana’s 2024 price prediction.

Trader Misses $1 Million Windfall by Selling Frog-themed Solana Memecoin a Day too early

In a surprising development a crypto trader failed to generate a profit of $1 million from a Solana memecoin he had invested in when he closed the trade a day before its price shot up tremendously.

After investing $8,000 in a frog-themed Solana memecoin called Book of Meme (BOME) the trader closed the trade and earned $131,000. Although that was a substantial gain the investor could have raked in $1 million if he/she had waited for 24 more hours.

Darkfarms, Pseudonymous Art Producer, Astonished by Massive Turnout for Book Meme Presale

In related crypto news, Darkfarms, a pseudonymous art producer, who launched the Book of Meme project was surprised by the number of investors who participated in the early Solana token sale (BOME).

Darkfarms believes that the project was not only experimental but also had a “weird allocation” during the meme sale. However, in the meantime, the crypto project founder said that they are in the process of mapping a strategy to create pools with much liquidity.

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The experience of the above-mentioned Solana memecoin trader is not an isolated occurrence. On 11 January this year a trader who purchased Solana Meme Coin Dogwifhat (WIF) worth $9 million and later sold it lost 60% due to slippage when he/she closed the trade. A popular crypto trader Gameshoe commented on X as shown on the screenshot.

Source: x.com

The reason for the loss was that the trader placed a big sell order on a relatively low-liquidity pool. Thus, before the order was uted the price of WIF dropped significantly leading to a slippage loss of more than $5.7 million. The following image shows the WIF price surge and drop.

WIF Price Surge – TradingView

The surge enticed the trader to place a sell order, however the WIF plummeted before the order was uted. It is worth noting that WIF, another Solana based memecoin, is also currently trending.

Solana Eco Surged by 80% in November, Sparking Solana Memecoin Frenzy with Tokens like BONK

The Book of Meme was not the only cryptocurrency that experienced a strong price move in the last few months. The current bullish market started in October 2023 when there was a Solana price surge of about 50%.

More significantly, since that time the Solana price has been in a constant uptrend. Of course, it witnessed peaks and downs along the way, depending on the level of investment within the Solana eco during a specific period.

As an instance, there was a Solana eco surge in November 2023 that led to an 80% SOL rally. Similarly, several Solana based meme coins like BONK, Silly Dragon and Dogwifhat also gained by high margins.

Due to the rise in Solana investments targeted at its popular tokens like BONK and WIF the total memecoin market capitalization has increased to over $60 billion. The current Solana market trends show a rise in demand for the eco’s memecoins. Going forward, the high demand for these memecoins is likely to re-ignite a sustained Solana price increase.

Solana Price Surge in March 24

Solana (SOL) remains bullish during March despite losing its original momentum. Although SOL has registered a decline in the short-term it has recorded gains in the longer periods.

For instance, Solana, trading at around $175.40 at the time of writing, lost by 0.8% within the last 24 hours and by 8.7% within the last 7 days. Nonetheless, it gained by 21.3% within the last 2 weeks and 72.2% within the last 30 weeks, showing a long-term bullish trend.

The following Solana price chart indicates how the cryptocurrency performed within the last few weeks

Solana Price Movement in March – CoinGecko

As observed, the SOL price had been gradually increasing since the beginning of the month until 18 March when it reached $208.05. Currently, the cryptocurrency is 32.6% shy of its all-time high of $259.96, attained on 6 November 2021. In the meantime, the Greed and Fear index shows that Solana is within the Greed Category.

Solana Greed and Fear Index - CFGI

As noted above, SOL has a score of 60% rate on the Fear and Greed Index. When the cryptocurrency has such a Greed score it means that its price may continue to rise as it is in an accumulation phase.

Conclusion

Due to the volatile nature of cryptocurrencies, particularly memecoins, investors may generate much profit or incur huge losses within short periods. We have an example of a trader who purchased BOME for $8,000 and sold it for $131,000. However, if he/she had waited for another 24 hours he might have raked in around $1 million. The high demand for Solana based memecoins has helped to maintain a strong momentum for the SOL crypto.

Author: Mashell C., Gate.io Researcher

*This article represents only the views of the researcher and does not constitute any investment suggestions.

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