As the cryptocurrency markets cooled in May 2021, some investors used this opportunity to stock up on tokens that they could not buy in the bull market cycle for fear of buying them at record highs. While others clung to the tokens they had already bought, hoping for a market revival.
Falling prices are both an opportunity and a threat. In the short term, this will undoubtedly lower the overall value of the investor's portfolio. In turn, this could reduce the purchasing power of investors, as their available investment money is now tied to tokens already purchased, which may be worth significantly less than originally invested. On the other hand, the ability to act and make purchases in these circumstances can perhaps be of great benefit to those who have patience and confidence in market cycles. Moreover, with low prices, there are opportunities for people with disposable income.
The 2021 cycle can be compared to the 2017/18 cycle, except that the resistance lines for the token price moved up. Using this extremely simple view, it can be argued that after a price increase, BTC may return to price sideways for the foreseeable future.
Best DeFi Tokens
This article reviews the tokens of several of the leading DeFi protocols from the year to date. The goal is for you to look at historical price movements before and during a bull run, and then try to predict their future price. This is a theoretical view of prices and trends and should not be used in any way for investment decisions other than for informational purposes.
The Uniswap UNI token was introduced in mid-September 2020. For those who don't know, Uniswap is the leading decentralized exchange on the Ethereum network and has long been considered the DeFi champion. The initial price of the token was a modest $ 3.44, and there was no significant price increase until the bull market really started in January. Peaking at over $ 42. Using May 24 as an indicator of the end of the bull run, one can see that the price dropped to $ 14.64.
In addition, the Uniswap platform over the past 30 days has seen nearly 350,000 unique active wallets interact with its smart contracts. This is a strong indicator of audience loyalty.
Example (no commission): buying 10 UNI tokens for about $ 150 at the lowest price after the fall. Wait a while and then selling UNI at close to $ 40 per token could bring you a $ 250 profit.
SushiSwap is a fork of the Uniswap platform. It is essentially the same platform with improvements that have allowed users to gain more access to the farming and betting capabilities that were launched from the start with their own token. The SUSHI token fell at the end of August 2020. The initial cost of the token was a modest $ 2.59, and in the first days after the launch, the price rose and fell sharply. It remained at around $ 1 until a bull market really broke out in January. Peaking at over $ 23.05. Using May 24 as an indicator of the end of the bull run, it can be seen that the price dropped to $ 6.35.
SushiSwap saw over 50,000 unique active wallets interacting with its smart contracts in 30 days.
Example (no commission): Buying 10 SUSHI tokens for about $ 70 at the minimum after the fall. Wait a while and then selling SUSHI at close to $ 23 per token could bring you a profit of $ 160.
PancakeSwap is essentially SushiSwap on the Binance Smart Chain. It offers users the same services as the leading DeFi applications such as staking, token exchanges and farms, but importantly, all actions performed on the platform do not incur Ethereum gas fees. The CAKE DeFi platform's own token dropped around the end of September 2020, so this is once again a good example. Cake began trading at the modest $ 0.43 and did not see significant gains until the end of January began a bull market cycle. Peaking at $ 42.46.
The PancakeSwap platform has over 2 million unique active wallets over the past 30 days that interact with its smart contracts.
Example (no commission): Buying 10 CAKE tokens for about $ 110 at the low after the drop. If you wait for a while and then sell the CAKE at a price close to $ 42 per token, you will make a profit of $ 310.
Doing all three of these trades and then making the profit calculated here later can be good money. With an investment of $ 330, the profit margin can be $ 720. Of course, add more zeros to the initial investment used in the examples and the margin will skyrocket.
As mentioned, this theory can be true for any token as long as it has a significant enough shelf life for analysis. Of course, these are very basic studies. What is really important is the investor's understanding of the project and his faith. It is important to note that belief can only be formed through exploration, interaction, and analysis of trend data.