Hoeem, a pseudonymous crypto trader, outlined a three-wave trading strategy to navigate the volatile memecoin market.
What happened: Hoeem outlined to X an approach that categorizes trades into three different waves.
Wave 1: Characterized by high risks and rewards, low win rates, and a significant number of lag pulls. With thousands of new coins being launched every day, this wave of traders must be highly skilled at identifying vulnerabilities in smart contracts, wallet distribution targets, and supply holders. Wave 2: Offers a balanced risk/reward ratio, acceptable win rate, and reduced lag pull. Success at this stage is the most difficult for traders, as it relies on a solid understanding of social metrics and holder behavior to assess meme potential. Wave 3: Lower risk-reward ratio, but higher win rate. This stage is becoming more accessible due to established memes and minimal rug and smart contract complexity. If market conditions are favorable, the value of established memes can increase.
Also Read: Cryptocurrency Trader Details “Plan to Make Millions: Pick the Top 2-3 Companies in Each Sector Instead of Spreading Your Investments”
“Soon is important, but the third wave still presents a great opportunity,” the trader said. His insights highlight that despite the volatility of the memecoin market, it offers unique opportunities for savvy traders.
In this framework, memecoin leaders Dogecoin DOGE/USD and Shiba Inu SHIB/USD fall under the third wave and are unlikely to rise 100 times their current prices. Hoeem cited Pepe PEPE/USD and Dogwifhat WIF/USD as examples, which have given rise to a number of derivatives that cannot emulate the leader’s success.
Goatseus Maximus GOAT/USD and SPX6900 SPX/USD are the newest wave 1 entrants, while Popcat POPCAT/USD and Mog Coin MOG/USD could be classified as wave 2 meme coins.
What’s next: The impact of meme coins will be thoroughly explored at Benzinga’s Future of Digital Assets event on November 19th.
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