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Cryptocurrency massacre ahead? 3 tokens to dispose of before the bloodbath
The cryptocurrency sector has been experiencing strong growth over the past year. And while many of the top tokens have taken a breather after key catalysts like spot approval Bitcoin (BTC-USD) ETF and its halving, the recent selling pressure may cause some investors to consider which are the best tokens to sell and perhaps add in this current climate.
I’ve been generally bearish on meme tokens for a while now, and the three on this list might not be more surprising. Ultimately, over the long term, crypto projects that could generate significant and sustainable returns are those that provide real utility to end users. Indeed, these projects have heralded some catalysts that might deserve some attention, but ultimately it’s not the kind of utility that’s likely to lead to much, at least from my perspective.
I think investors looking to invest capital in this space need to be very selective. That said, here are three cryptocurrencies to sell right now.
Pepper (PEPE-USD)
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Inspired by the Pepe the Frog meme, Pepper (PEPPER-USD) has seen impressive surges over the past year and is currently making another run at what appears to be new highs. This makes the token a highly speculative momentum option for traders looking to bet on a new wave of interest in the crypto space.
It is a difficult token to short in this momentum. But I think long-term investors looking to preserve their capital would be better off moving away from a speculative asset like this to a more stable and respected project.
Lack of utility and high volatility have plagued Pepe in the past, with sharp rallies met with corresponding sell-offs. I’m not saying such a sell-off is in the cards anytime soon. But I think he’ll see some sort of fire sale in the future. Whether it comes from another doubling, tripling or higher from here remains to be seen. Like the other tokens on this list, investors may want to only invest the capital they can afford to lose in such a project, at least in my opinion.
Dogecoin (DOGE-USD)
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Launched as a fun altcoin for Bitcoin in 2013, Dogemoneta (DOGE-USD) now ranks eighth as one of the most valuable cryptocurrencies in the world. Although it has a market capitalization of $20 billion, it still lacks utility compared to other cryptocurrencies.
Strong community support is helpful, but enthusiasm may fade. If Dogecoin were used as a stable form of payment, it could bring a positive angle to the token. However, its long-term survival has yet to be determined. Unlike other cryptocurrencies that offer real-world utility, Dogecoin still lacks this aspect.
The recent bearish movement has caused the OI-weighted funding rate to decline, putting Dogecoin investors in a cautious state. Whales adding to the liquidations have fueled the panic, seen in significant DOGE transfers to exchanges, such as 245 million tokens worth nearly $50 million.
Analysts discuss the community’s influence on the stability of tokens. Smaller projects with active communities could counter recessions, but DOGE’s high volatility suggests disappointment for investors.
Shiba Inu (SHIB-USD)
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In 2020, Shiba Inu (SHIB-USD) has become a rival and equal to Dogecoin. Shiba Inu was built on the decentralized exchange UniSwap (DES). However, as the cryptocurrency market experienced a long winter, Shiba Inu collapsed along with others due to the collapse of the FTX exchange. This caused billions in losses and disappointment for investors.
As of this writing, Shiba Inu has broken downside resistance despite seller resistance. This suggested that analysts’ forecasts are low. Currently, SHIB is trading at $0.000024 and a possible move above $0.000033 could save the token. Analysts also predict a resistance target of $0.000039. Conversely, a drop below $0.000024 suggests profit taking, which could reach $0.000020.
Buying SHIB remains questionable, while it is building its ecosystem with DEX games, P2E and a metaverse. To be considered safe, investors are encouraged to sell if they have a low risk tolerance.
As of the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Guidelines for publication.
Chris MacDonald’s love of investing led him to earn an MBA in Finance and take on numerous leadership roles in corporate finance and venture capital over the past 15 years. His past experience as a financial analyst, combined with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investment outlook.