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Author Topic: Check Liquidity Before you invest  (Read 1337 times)
Pffrt
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February 16, 2020, 06:47:29 AM
Merited by tk808 (10), suchmoon (7), OgNasty (2), DdmrDdmr (2), RapTarX (2), o48o (1), Heisenberg_Hunter (1), rhomelmabini (1)
 #1

It seems like altcoin is having a good pump lately, many of the shitcoin has started to gain 100%  Grin
That's good and bad both to be honest. For them who have invested a lot of money in 2018 ATH, it's good for them but for newbie, this shitcoin may be destructive to your crypto journey unless you become very smart while investing.

One term I would like you to introduce is- "Liquidity"

I don't want to go in details here since the goal is to make you alert about low liquidity.

Liquidity is simple term refers to liquid your crypto asset into fiat or it can be BTC too. Since, most of the times we trade with BTC, I will go with BTC here.

High liquidity- You can sell your coin anytime as much coin you want, the market has enough buyer to buy your coin.
Low liquidity- There are no enough buyer to buy your coin.

You can check this easily in exchange. Just visit the market for a coin and check the buy and sell orders and the amount. If there are low buy orders despite a high sell order, this means you can barely liquidate your coins there.

SO, when you are going to invest in a coin, check the liquidity of that coin for a certain period. Otherwise, don't invest. Also, before depositing big amount in exchanges, check if there has enough buyer at your desired price to buy your coin. Scam exchange can attract you by pumping a certain coin in their exchange and once someone deposits a big amount, they scam.

The altcoin market is more complex then you can ever think of. There are thousands of ways of scamming you which you can never imagine, even after being scam, you can't realize that it was a scam. Before invest, be smart enough to learn the tactics and save yourself.
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February 16, 2020, 07:12:07 AM
 #2

The altcoin market is more complex then you can ever think of. There are thousands of ways of scamming you which you can never imagine, even after being scam, you can't realize that it was a scam. Before invest, be smart enough to learn the tactics and save yourself.

I would advice for most people to not try to trade crypto at all, it's a very easy way to burn your money, especially if you believe that you can find a "good project". Just holding Bitcoin is more than enough, it's growth rate is incredible compared to more traditional investments, but people get greedy and start looking at alts thinking they'll grow faster and higher.

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February 16, 2020, 08:01:12 AM
 #3

Investing in Altcoins is red flag especially for newbies, we all know the huge amount of scams going on even sometimes when you invest in a project with serious goals and clear roadmap, the team disappear instantly after their sales which highlight that ways of scam are evolving every day and comes with a new look so we have to be very careful and skeptical nonetheless I can still name a few new projects that can have a bright future.

I would like to point that making a profit from pump of shitcoins as you mentioned, firstly can only be a pump and dump act and secondly, it misleads newbies into investing without even mentioning that it is illegal and unethical so never forget "If it's too good to be true, it probably is".
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February 16, 2020, 11:10:28 AM
 #4

I would advice for most people to not try to trade crypto at all, it's a very easy way to burn your money, especially if you believe that you can find a "good project". Just holding Bitcoin is more than enough, it's growth rate is incredible compared to more traditional investments, but people get greedy and start looking at alts thinking they'll grow faster and higher.
Investing only in BTC is a good approach to minimize risk because BTC has liquidity all the time. But investing in altcoin has benefit as well although there are high risk. People with proper knowledge in trading can easily accumulate BTC through investimg in altcoin. I am not much expert. I have been studying some altcoin projects for couple of weeks. The goal is to invest some of my BTC and accumulate as much as possible. I guess that's not bad for your portfolio. Well, I agree that newbie must not get into these things without proper knowledge.

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February 16, 2020, 05:27:01 PM
 #5

Guys, if you thinking about investing in a coin which doesn't have liquid, you are doing something very wrong. Stop, study and startover.

Low liquid means that  nobody wants to buy or sell this coin. It really has no value. There is no reason to buy it.

I believe new comers should never invest in a coin which is not at least in top 200 on CMC, unless if it is an ICO.

Top 200 CMC is already full of shitcoins, but all of them have a decent liquid (as far as i know), are somewhat known project but are most of them small caps.

Most of them will fail in the long run.... but not all (probably)

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February 16, 2020, 06:25:08 PM
 #6

Low liquidity won't help investors earn decent money. I even know a project where there are investors. The project's token are listed in an exchange and not much trade are going on but still there are still people who buy and sell their tokens but for a very low price you can imagine.
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February 17, 2020, 07:51:25 PM
 #7

True words... Low liquidity is a gamble, but a high paying one if you're willing to go that route.

XSN, which is a low marketcap coin doesn't have a HUGE liquidity, BUT has enourmous potential in terms of market adoption, since one of their main goals is to make crypto easier for everyone to transact with.
A good example is their Lightning based DEX, which will be controlled by masternodes, hosting Lighting channels, hubs, and who will do all the "dirty work" in the backend. Everyone who wants to use their DEX, can trade near instantly, with next to 0 fees, and without syncing with any networks, doing KYC, or anything else for that matter.

Does low liquidity on XSN make it a bad investment? Absolutely not! The DEX itself will open the doors to a LOT of new traders, but overall, I agree to stay away from most projects with next to 0 volume.
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February 17, 2020, 07:58:53 PM
 #8

Almost all the new coins and tokens launched in last 2 years are suffering in liquidity some are even suffering for listing on an exchange, the situation was very bad, now with improving market i think conditions for new projects will improve as well, some good new projects that i thought wwere under pressure just because of bearish market have high chance of waking up and improve their market.

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February 17, 2020, 08:18:46 PM
 #9

Usefull topic! Smiley
You are right about the scams, those guys have ways that we don't even dream of... and we'll never realise we were scammed...
Checking liquidity is a good method to decrease the probability of being scammed, as at least there is a healthy market to liquidate your invested when you need to... but beware, there are a lot of ghost buy orders too...

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February 17, 2020, 08:39:50 PM
 #10

Hello everyone. I would say that there is huge variety of different solutions coming onto the market, so I am here with the strategy I personally use. In my opinion, mine is pretty rational and can help to find the most advanced solutions
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February 17, 2020, 08:40:57 PM
 #11

Hello everyone. I would say that there is huge variety of different solutions coming onto the market, so I am here with the strategy I personally use. In my opinion, mine is pretty rational and can help to find the most advanced solutions

Evening. I agree that there are many aspects that matter. And I am not only talking about the idea as the idea, but much more about complex approach. So curious to hear your views
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February 17, 2020, 08:41:41 PM
 #12

Evening. I agree that there are many aspects that matter. And I am not only talking about the idea as the idea, but much more about complex approach. So curious to hear your views

Basically, mine is the pretty complex - I am starting with the niche. For example, talking about me, I am fond of different progressive IT solutions for automative industry. After the niche is chosen, I have a look at the solutions that are having the highest ratings along with real feedback from users. And then I am also evaluating things on my own, paying attention to team, opportunities and more
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February 17, 2020, 08:42:24 PM
 #13

Basically, mine is the pretty complex - I am starting with the niche. For example, talking about me, I am fond of different progressive IT solutions for automative industry. After the niche is chosen, I have a look at the solutions that are having the highest ratings along with real feedback from users. And then I am also evaluating things on my own, paying attention to team, opportunities and more

Hmm, definitely interesting and rational strategy. And are there many examples of such solutions you have in mind? Any you can recommend?
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February 17, 2020, 08:44:03 PM
 #14

Hmm, definitely interesting and rational strategy. And are there many examples of such solutions you have in mind? Any you can recommend?

The most advanced one I am aware of is Carnomaly - team is setting entirely new standards on the market. In few words, Carnomaly will become the first company ever to offer a worldwide rebate for an automotive purchase. Both new and used vehicles will apply, as long as they are purchased from a verified legal dealer anywhere in the world. Upon completion of our consumer platform, Carnomaly will begin buying back tokens to replenish the rebates for years to come. Of course, there are much more benefits, what I recommend you to have a look at - their website. A lot of useful info is available there, have a look
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February 17, 2020, 08:45:02 PM
 #15

The most advanced one I am aware of is Carnomaly - team is setting entirely new standards on the market. In few words, Carnomaly will become the first company ever to offer a worldwide rebate for an automotive purchase. Both new and used vehicles will apply, as long as they are purchased from a verified legal dealer anywhere in the world. Upon completion of our consumer platform, Carnomaly will begin buying back tokens to replenish the rebates for years to come. Of course, there are much more benefits, what I recommend you to have a look at - their website. A lot of useful info is available there, have a look

Great, thank you for the recommendation! Will have a look
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February 17, 2020, 08:55:01 PM
 #16

Guys, if you thinking about investing in a coin which doesn't have liquid, you are doing something very wrong. Stop, study and startover.

Low liquid means that  nobody wants to buy or sell this coin. It really has no value. There is no reason to buy it.

I believe new comers should never invest in a coin which is not at least in top 200 on CMC, unless if it is an ICO.

Top 200 CMC is already full of shitcoins, but all of them have a decent liquid (as far as i know), are somewhat known project but are most of them small caps.

Most of them will fail in the long run.... but not all (probably)
It is very sad that this is exactly what is happening to 99.9% of all the coin that are newly listed. After few days of pump and dump when listed on exchange, then the token will become useless and the volume in trading will continue to drop until there is little or nobody trading the coin again and this is always the time in which just few dollars in buy order can have influence on the price of the token but when you check the trading volume, you will realized d price is nothing

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February 17, 2020, 08:58:07 PM
 #17

I do not think you can blame developers for their tokens not having real liquidity, there are some good projects in the space that suffered because  they were listed o 2nd to 3rd tiers exchanges. The problem is with exchanges rather than the project, most of these exchanges lacks liquidity though there are some tokens also on Binance that have this issue

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February 18, 2020, 02:17:52 AM
 #18

Thanks for this, some persons don't check the liquidity of the market all they do is to just check the percentage gain as reported by CMC and they just FOMO to buy a dead coin. Even if a project has good liquidity in a shitty exchange, I won't buy regardless of the gain, the developers and shitty exchange could fake anything. I have decided to be trading on Binance since the beginning of this year and have been getting some good result that pays my daily bill.
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February 18, 2020, 04:54:37 AM
 #19

I do not think you can blame developers for their tokens not having real liquidity, there are some good projects in the space that suffered because  they were listed o 2nd to 3rd tiers exchanges. The problem is with exchanges rather than the project, most of these exchanges lacks liquidity though there are some tokens also on Binance that have this issue
exchanges and projects have correlation, usually tier 2 or tier 3 exchanges will allowed projects to list in their exchanges easily. meanwhile in big exchanges such as binance or huobi, they will carefully filtered project quality. for example , in binance global group they regularly held AMA with projects that will join in community voting. its usefull to to traders or investors about projects. so if dev team could not bring their token in big exchanges, we must doubt and blame them about project quality.
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February 18, 2020, 05:41:06 AM
 #20

I do not think you can blame developers for their tokens not having real liquidity, there are some good projects in the space that suffered because  they were listed o 2nd to 3rd tiers exchanges. The problem is with exchanges rather than the project, most of these exchanges lacks liquidity though there are some tokens also on Binance that have this issue
You are mixing some things which I didn't mean here. I have tried to highlight the point that this type of changes can be a kind of trap which can deceive you, it may look like normal to a newbie but behind the scene, it is a well planned scam.
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