Original author: Ann, Crypto Researcher
Original translation: Bize Research Institute
By observing the market trends in the first half of 2023, I have compiled a list of volatile tokens that have performed well.
The key criterion for making the list is, of course, volatility. Just like the rest of the market, if the market crashes, these tokens will also experience a decline, just not as significant as other tokens. However, what sets them apart is their strong rebound, often providing traders with an opportunity to make daily profits of 10%+.
In addition, the price fluctuations of these tokens are ideal for traders following the DCA (Dollar-Cost Averaging) strategy, as they provide immediate satisfaction. Don't you like assets that rise in value after being bought at the bottom (support level)? Don't you prefer assets with a clear bottom rather than those that might not have one?
Arbitrum (ARB)
ARB, the native token of the leading Ethereum L2 solution Arbitrum, is a relatively new token, having been launched less than a year ago (March 2023). Due to its launch during a bear market, it has not yet experienced a true "boom moment".
If you examine the chart below (sourced from Coingecko) closely, it is easy to see what sets this token apart from others. Overall, ARB's performance this year has not been outstanding. However, compared to most tokens that have experienced a 90% drop since the peak of the bull market in 2021, the price chart of ARB is not as dismal.
This year, ARB has experienced several price increases, but there have been no significant fundamental reasons behind them. The most recent one occurred during the ETHCC event, with rumors of major announcements from the project team (which ultimately did not leave a profound impression on people).
In addition to some technical analysis predictions, I have some theories about the reasons behind these price increases.
ARB still has a long way to go before it experiences investor token unlocks. According to DeFillama's data, the first unlock of ARB will begin in 200 days, which is March 22, 2024.
Therefore, since the token's release, there has not been a large-scale sell-off of ARB. Coupled with the assumption that most people who obtained ARB through airdrops have already sold, this has caused some volatility and created profit opportunities for traders.
As the token unlocking time approaches, we can be sure that the ARB price will drop. But having spent enough time in the cryptocurrency market, I know that token prices tend to rise before unlocking. I know this may sound strange, but if you understand the game theory in the cryptocurrency market, you would know that investors won't sell their tokens cheaply. The rebound "helps" create FOMO and provides liquidity for the massive sell-off by these investors. Although this theory is just an urban legend, it still makes sense to think about it.
Fundamentally, even during a bear market, Arbitrum has successfully established itself as one of the successful projects. It has found a niche market, namely becoming the No.1 DeFi L2. Additionally, GMX, built on top of it, has become a "mascot" protocol that attracts new users and increases fee income.
Overall, the combination of token conditions and intrinsic value make ARB a good volatility asset.
Optisium (OP)
At the time of writing this article, OP is going through its token unlocking time, causing some price fluctuations. (August 30, 2023)
OP, the native token of Ethereum's another leading L2, Optimism, is a recent example of how a token rises before the unlocking event.
Within two months, OP rose from $0.89 to $1.8. In the recent meme coin frenzy, OP also experienced relative prosperity, rising alongside tokens like BALD or UNIBOT.
The reason for the rise (excluding any market irrational factors) is the recent improvement in Optimism's reputation. Coinbase has built their Base chain on top of Optimism's OP Stack and signed a revenue-sharing agreement beneficial for both teams. Not to mention, the launch of the OP Stack and OP Stack Chain ecosystem itself during the ETHCC event has contributed to the excitement and price rise in the market.
Coinbase's partnership with Optimism confirms the top-tier status of Optimism's L2 and challenges Arbitrum.
My personal experience trading OP is that there is a demand for this particular token. Reversals always happen quickly and aggressively during downturns. On Binance, OP has a considerable trading volume and is one of the highest-traded tokens, with even greater volume in its perpetual contracts.
Solana (SOL)
After last year's catastrophic moment for FTX, Solana is embarking on its path to redemption. After a year of perseverance, the community seems to be improving.
Due to the "SBF effect," I may have a bias against Solana. (I dislike SBF, so I find everything he promotes intimidating, including Solana.)
However, I have to admit that Solana is very resilient. Solana has its own loyal user and developer community.
Since February, Solana has achieved zero downtime - setting a record for the longest continuous uptime. It's something they can rightfully boast about. In comparison, Arbitrum has experienced several interruptions this year alone. For example, in June, the network was interrupted due to an ordering error.
In addition to SBF, Solana also has a significant "coalition" supporting them - Jump Crypto. It's worth noting that Jump Crypto is on par with Wintermute and Alameda in terms of market making. Therefore, when SOL decides it's time to make a comeback, I expect the SOL price to rise unexpectedly.
This year, the SOL price has often remained within a certain range. It's evident from the chart that whenever SOL touches the low area, it bounces back quickly.
Ethereum (ETH)
When it comes to prices not staying low for long, no token can compare to Ethereum.
Cheap ETH is always in demand. For example, in the recent crash, while Bitcoin dropped from $29,000 to $26,000, the Ethereum price fell to around $1400-1500 but only stayed there momentarily before quickly rebounding to $1600.
And whenever a new "traffic explosion point" appears on the chain, the ETH price will quickly rebound with the rise of Gas fees.
Ethereum has some liquidity issues because most of the circulating ETH is staked or locked in DeFi instead of being on the open market. Therefore, recently ETH has not had much ups and downs, which is a bit annoying for traders and hodlers.
Conclusion
August is one of the most disliked months in the cryptocurrency market in recent years. Now that August is over, what's next?
You need to understand that things don't stay at the bottom or the top forever.
Usually, the end of the year is a good time to accumulate positions. That's why I believe it's a good idea to share this list of volatile tokens. Because when a big market rally comes, you don't want to miss out on the (crazy) uptrend, but at the same time, you will also miss out on the (crazy) downturn.
Note: The above projects and opinions should not be considered investment advice. DYOR. According to the notice issued by the central bank and other departments on "Further Prevention and Disposal of Risks in Virtual Currency Trading Speculation," the content of this article is only for information sharing and does not promote or endorse any business or investment activities. Readers are strictly required to comply with local laws and regulations and refrain from participating in any illegal financial activities.
