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The cryptocurrency market requires a delicate balance between risks and opportunities, and prudent risk management is crucial for investors seeking positive outcomes. In an environment of increasing geopolitical tensions, the inherent volatility and uncertainties of the crypto world have become more pronounced. The recent market upheavals, such as the significant liquidations on April 19 totaling about $300 million, have demonstrated the importance of adopting a cautious trading strategy. In light of these assessments, three altcoins have been identified for investors to approach with caution in the coming days and weeks.
Ripple (XRP)
The first altcoin considered risky is Ripple (XRP), which naturally carries risks due to periodic sales conducted by its largest holder, Ripple. Particularly, the recent unlocking of 1 billion XRP, some of which are earmarked for potential sales, has increased concerns for this altcoin.
Historically, Ripple’s previous sales have impacted the altcoin’s price, caused fluctuations, and tested significant psychological levels. Therefore, investors looking to buy XRP amid potential sales are advised to be cautious.
Arbitrum (ARB)
Similarly, Arbitrum (ARB) has come under scrutiny after the recent unlocking of 92.65 million ARB allocated to the protocol team and investors. This significant unlocking, worth over $100 million, has raised concerns about potential market impacts.
Since ARB‘s market value is approximately ten times lower than that of XRP, those allocated tokens may continue selling, requiring a cautious approach to mitigate related risks.
Bonk (BONK)
Attention should also be paid to Bonk (BONK), a memecoin operating on the Solana Blockchain, which has experienced a significant drop in value over the past month. The declining interest of memecoin investors and key economic principles have caused BONK’s market value to fall below $1 billion.
While memecoins can exhibit irregular price movements due to speculative fervor, underlying economic principles like the Greater Fool Theory highlight the natural risks associated with these assets. Therefore, experts advise investors to be cautious when investing in BONK and similar memecoins, considering their susceptibility to sudden price fluctuations and speculative bubbles.
