Gem Hunting 101: Following Strength

Gm, Anon,

Today we’re going to tie together some recent topics we’ve been covering such as how crypto is at the mercy of the attention economy, searching for projects looking to seamlessly integrate crypto into real life and understanding the role of toxic tokenomics so you don’t end up someone’s exit liquidity.

The tl:dr of the past couple weeks is:

1. Attention is the most powerful force currently driving markets

2. Look for projects aiming to make crypto simple and easy to use

3. Avoid toxic tokenomics with lots of sell pressure on a token

All well and good but let’s put things into practice and see what kinds of gems we can unearth.

One important lesson you always want to remember about crypto is that attention is king and in that regard, you want to follow strength. 

This is a key principle that we’ve seen time and time again. Strong performers tend to outperform. It is in your best interest to pay attention to market leaders instead of focusing on stragglers hoping they’ll eventually catch up as it’s uncommon to see beta plays do better than the leaders.

In today’s strategy, we’re going to be using CoinMarketCap to rank some of the top performing coins over the past 90 days and see if we can find some quality projects. To cut out some of the noise, we’re filtering coins that have a market cap of over $20M and trading volume over $1M.

The first thing that should stand out to you is that memecoins are dominating this list. What’s the lesson here? Memes have been the meta over the past several months and if you truly wanted to find strength, you’d be following the money and be deep in the shitcoin trenches.

Of course today we’re not looking to step into the meme trenches (perhaps another time?), so instead we’re going to search for coins with “value”. 

A few interesting things pop up. 

Let’s take a closer look. 

iMe Lab - $LIME

Amongst the memes, we’ve got a coin, LIME, that allows sending crypto in your iMe wallet to contacts via their Telegram handles. So safe to say that this project is plugged into a current popular attention narrative and the idea is simple and definitely fits into the theme of looking for projects aiming to seamlessly integrate crypto into real life. 

We can see that this coin has been around since 2021, topped in November of that year with the rest of the bull market and then sank into a deep bear market for all of 2022/2023. Then suddenly, in March of this year, it jumped from about a $3M market cap to about $30M-$50M market cap.

What happened here? It’s most likely due to its association with the developing TON/Telegram ecosystem which has been on fire recently and has broken into the top 10 coins by market cap. 

In fact, we can see the simultaneous movement in March of this year: 

How’s the token distribution for LIME? Looks like less than half of the total tokens are currently in circulation. 472,038,858 circulating vs a total 1,000,000,000 that will ever exist. 

With a current market cap of $37M and a fully diluted market cap of $78M, this means that there is still a decent amount of locked coins that will eventually hit the market and suppress potential price growth. 

Another important observation to always note is how easy is it for people to buy?

We can see that this coin has no major listings yet but it’s currently available on 3rd rate degen exchanges like Gate.io, MEXC and Bitget, Why is this important? Because if we want the price of our investments to go up, they must be available on major exchanges like Binace and Coinbase where retail can easily buy. 

So what’s the conclusion?  

This strong performer over the past couple months has a decent narrative going for it (Telegram narrative), it’s working on a decent idea of making crypto easy to use for normies, there’s still potential listings that could make it more accessible to retail, however there’s still more than half the tokens waiting to hit the market and tokenomics details aren’t readily available (not a great sign).

Referring back to this explainer we did on understanding market cap levels, if this coin can sustain its current price action and continue to gain traction, we’d look to see this coin reach the next market cap level of $100M. 

Can it almost 3x from here? If the Telegram narrative continues to grow, could we expect to see more coins within the ecosystem approach the coveted $1B level? Considering we’ve already seen multiple useless memecoins hit that level, it’s not an unreasonable expectation.

As a sneak peek of what we’ll be covering in our chat, you see this awesome chart but it has a market cap of $90M vs a fully diluted market cap of $3B. What you doing?