Dollar-Cost Averaging Into Mid-Cap Memecoins

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7 Jan 2025

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Mid-cap memecoins tend to be valued in the tens of millions of dollars regarding market capitalization. Perhaps, even $100 million or more. Blue chips tend to be in the billions of dollars. Then there are the more speculative memecoins, ranging from thousands to hundreds of thousands of dollars. As mentioned, I prefer mid-caps as they have a track record and have survived the initial boom and bust cycle that tends to occur with every memecoin that enters the market.
The majority of memecoins are one-hit wonders. Their legacy lasts a few days, and nobody remembers or considers them again. Investing in memecoins straight off the bat is far too risky. I experimented with this approach in 2023 and 2024. However, I found strategic and already established memecoins superior regarding favorable risk/reward ratios.
Finding a few memecoins that fit a particular narrative and have a good long-term outlook can be a viable opportunity. This is especially true if a DCA approach is adopted. The volatility of the memecoin market provides excellent entry points on an ongoing basis. Missing a good entry point is often not fatal, as the market comes around again providing a second or third opportunity. Volatility is the standard when it comes to memecoins.
A Structured DCA Strategy
Dollar-cost averaging strategies are usually time-based. In other words, every week or every month. However, regarding memecoins, it might be advisable to implement a “correction-based” strategy. This strategy would require a price correction and depending on the particular asset and its price action, a standard percentage drop can be adopted as an entry point. For example, every time the asset experiences a correction of 10% it can be implemented.
This ensures that the investor continually buys during a time of weakness. This is similar to using the Fear & Greed Index to buy. Buying weakness is statistically more effective than strength. On occasion, buying strength plays out. However, when dealing with memecoins, caution should be the default approach. This unpredictable and volatile market can strip you bare in an instant.

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As mentioned in a recent post, Vita Inu (VINU) has captured my attention regarding a BNB-based memecoin. It has existed for some time and has price action that favors a parabolic breakout. I expect VINU to rally once BNB breaks the $900 mark. An extended rally could be ignited once BNB shatters the $1000 mark. Memecoins rally in multiples relative to the underlying chain, in this case, BNB.
Dollar-cost averaging with small amounts every time the price action warrants has proven to be a relatively safe strategy. Effective risk management is an imperative aspect of memecoin trading, and without it, you are likely to get REKT. It can be compared to skydiving without a parachute. Being on the right side of a parabolic memecoin trade is amazing. However, being on the wrong side of a rug is downright soul-destroying.

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Final Thoughts
There are a few memecoins I am slowly building positions in. However, nothing too extravagant. If a memecoin investment plays out it can be life-changing. Choosing memecoins within the mid-cap sector creates a realistic expectation of at least 20X to 50X in a favorable outcome. Remember, altcoins explode in the final weeks of a bull market. This is always one of the key indicators that an end is in sight. All the best! See you next time!

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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.