I’m having trouble fully understanding how liquidity works when trading memecoins. I buy and sell memecoins regularly, but I still don’t grasp how liquidity affects my potential profits. For example, let’s assume I bought a coin during its early stages for $600. Over time, the coin grows 10,000x, which would make my holdings worth $6 million. Now, suppose the coin’s market capitalization is $300 million, and the available liquidity ranges between $10 million and $20 million.
My questions are:
Is it possible for me to sell my $6 million worth of coins and actually receive the full amount without losing any money due to liquidity limitations?
If I am likely to lose some money when trying to sell such a large amount, how much would I potentially lose in this scenario?
Are there strategies or methods I can use to reduce or minimize losses caused by low liquidity when selling large positions in memecoins?
I want to understand clearly how liquidity impacts large trades so I can plan my exit strategy effectively and avoid unexpected losses.
submitted by /u/jon1254
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