Solana-Based Micro-Caps - Massively Oversold & In The Zone!

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31 Jul 2024

Seasonal
The tide turns and seasons change. Regardless of how altcoins may appear, a turnaround is on the way. As I mentioned in a recent post, Solana 2.0 will be another opportunity to benefit from Solana’s second wave. The layer 1 effect will produce multiple opportunities within the Solana ecosystem. Yes, memecoins are included. However, another sector also has significant potential but with a reduced level of risk.
Micro-caps are risky investment vehicles. However, the risk profile is significantly lower than that of memecoins. Micro-caps are generally new up-and-coming projects varying from layer 1s to gaming projects. These are typically projects with a market cap of $1 million to $20 million. This is a range I tend to scan and research due to the risk/reward ratio being in sync with my risk profile regarding micro-caps.
Even in a bull market altcoins are seasonal and experience several mini altcoin seasons before the final rally that usually lasts between three and four weeks. This dynamic is addressed in “The Most Anticipated Altcoin Season”. However, on the road to this final destination are multiple surges within the altcoin market. It can be difficult to identify these waves so my approach is to identify and accumulate long-term altcoin positions.
When I refer to long-term, it is usually a two to three-year period. One can sell peaks and then repurchase more coins at a lower price. Furthermore, additional accumulation can take place during the dips. This is done in anticipation of the final wave in the altcoin market, which usually dwarfs previous mini-altcoin seasons. Once again, this is depicted in “The Most Anticipated Altcoin Season”.
Bargain Hunting Within The Solana Ecosystem
Choosing to invest in Solana-based micro-caps is a lot less risky than simply investing in random micro-caps. For example, projects now much more significant regarding market cap have proven to rally and dump alongside Solana. In other words, they are tethered to Solana. However, regarding percentage moves, they outperform Solana significantly. Projects such as Solanium (SLIM) and Decimated (DIO) have a pretty good track record.
Several newer projects within the Solana ecosystem have been severely punished in recent months. Projects such as Star Atlas (ATLAS) and Picasso (PICA) have absorbed enormous losses in price and market cap valuations. However, heavily oversold projects with a future are often the best bargains to pick up during heavy market corrections. Bitcoin remains relatively strong. However, altcoins have bled out during this time.
When Solana breaks out into Solana Season 2.0 many of these micro-cap projects are going to bounce as a result of the layer 1 effect. Being micro-caps, the expectation is that these moves will significantly outperform Solana. Regular readers will remember that this was the idea behind the BONK investment decision, which rallied beyond my expectations and has been my best-performing altcoin pick of the current cycle.
Micro-caps that fall into this category and are a part of the Solana ecosystem offer a good risk/reward ratio. Keeping an eye out for significant partnerships and other announcements is also an important point to remember. Such events can trigger a rally regardless of the general market sentiment. Having an understanding of technical analysis will also aid in identifying great opportunities.

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Final Thoughts
There’s no doubt that Solana will continue to be a dominating player in this bull market. Choosing to leverage and harness its performance is a relatively safe way to gain access to altcoins, and more specifically, micro-caps. This is not a sector for everyone, especially newcomers, so DYOR and understand the risks involved. All the best! Catch you in the next one!

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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.