In the crypto market, meme coins often tell rags-to-riches stories with their sudden price rise. A recent revelation from Lookonchain, an on-chain analytics platform, shared such a story.
Lookonchain further detailed the timeline of the transaction. It showed the strategic timing of the purchase.
KITTY’s meteoric rise as The Roaring Kitty returns
A lucky trader capitalized on a large market opportunity. They purchased 17.4 million Roaring Kitty (KITTY) meme coins for 21.2 Solana (SOL), worth approximately $3,000.
When the value of the meme coin soared by over 6,000%, the trader made a profit of 294 SOL. That figure comes to about $41,000.
However, the trader is still left with 4.6 million KITTY, valued at approximately $56,000. In total, this trader made a profit of $94,000, almost 32 times his initial investment.
Keith Gill, a financial analyst known as The Roaring Kitty online, sparked the price rise. Its return to social media platform X (formerly Twitter) prompted traders to speculate on the KITTY meme.
Gill, renowned for his central role in the GameStop stock market frenzy of early 2021, had remained out of the public eye since his withdrawal in late 2021. back with a token tweet was enough to get coin traders excited. They respond quickly to trends and activities of public figures.
In addition to propelling KITTY’s price, Gill’s return influenced another meme coin, GameStop (GME). At the time of writing, GME saw an increase of approximately 376% on the charts over a 15-minute time frame.
Despite these successes, Lookonchain warned of the risks inherent in trading meme coins, such as possible rug pulls. In the crypto market, rug pull is a scenario in which developers abruptly remove liquidity, leaving investors with worthless tokens. This warning was highlighted in another Lookonchain report involving the meme coin Vibe Cat (MINETTE), in which a trader turned 999 SOL into $2.5 million in just 15 hours.
“Note that the developer of VibeCat (MINETTE) did not burn the LP tokens, there is a risk of a pull. At the same time, insiders will dump large amounts of tokens on you,” Lookonchain wrote.
Meme coins can generate significant returns overnight. However, they require a deep understanding of market trends and the impact of influencers. Rasgard, cryptocurrency trader sharing several key strategies for trading meme coins effectively.
He suggests investing small amounts that one is willing to lose. He also recommends understanding market dynamics. Understanding broader Bitcoin market sentiment is important because it significantly influences the value of meme coins.
Additionally, Rasgard highlights the importance of joining a trading group and how social media is crucial to the popularity of meme coins. These strategies can be beneficial in terms of decision-making.
Still, he warns against scams and suggests performing security checks on meme coins. It is also important to be wary of market manipulation by large holders.
Indeed, meme coins can bring high returns. Yet they require a careful strategy and a clear understanding of the risks involved.
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