Dump following the mainnet launch? Careful with Tron and EOS

There is a famous investing adage: “buy the rumor, sell the news.” If you observe crypto markets for a certain amount of time, this advice has been proven true more times than not.

Markets are typically driven by emotion and because of this when a rumour with expected positive sentiment comes out, it generally means the price is going to increase leading up to the actual news release.

Probability shows that more often than not this pump spikes when news is released and then a subsequent correction occurs.

And don’t think this is just a cryptomarket phenomenon, it’s a market phenomenon. For example, Apple’s share price increased leading up to the PC for it’s new Iphone. After the PC the stock dipped likely because traders were realizing profit at the top of that particular pump.

The whole month of May has been overshadowed with news about imminent Tron (TRX) mainnet launch. Tron and its founder Justin Sun are no doubt true marketing wizzards and know to create a lot of suspension and hype in crypto community. Deploying a mainnet is a big event for any crytpo coin and TRX took the anticipation levels to another planet.

The price followed the hype – the rise in the value of Tron is attributable to the rising interests from investors towards the mainnet launch of the Tron network. The Tron mainnet is expected to launch on May 31.

Another coin, similar to Tron is EOS. They are not so aggressive with their marketing but they are a regular topic of debate in cryptoverse because of their year-long ICO where they collected a lot of money.

A fascinating thing is that, both EOS and TRON, without a working mainnet, reached valutions of  $14 billion and $6 billion respectively, with a daily trading volume of above $6.4 billion.

Currently, traders are concerned in regards to a potential dump that may occur immediately after the mainnet launch of Tron and EOS, as investors in the cryptocurrency market tend to buy the rumor, news, partnership, and product launch, and dump the cryptocurrency quickly thereafter, as soon as a partnership or a product launch is finalized.

So be careful with your TRX and EOS holdings in the upcoming days and weeks. The news and hype around the mainnet launches are already baked in the current price so selling the news right now might be a good tactic – sell already at a profit based off the hype of the news.

Holding through the news is usually just greed trying to get more, and 9 times out of 10 the news isn’t all it’s been hyped up to be so he price goes down. That is unless you aren’t planing to hold EOS and TRON for the next few years then you shouldn’t even paying any attention to the regular bull and bear runs anyways.

How to Play Rumors and News

Thus one could say the best moves would have been:

  • Buy positive events that occur without rumor.
  • Buy positive rumors.
  • Sell negative rumors.
  • Sell before or shortly after any event that positive rumors have been building up to.
  • Sometimes it can make sense to buy before any event that negative rumors have been building up to.
  • If an event doesn’t occur on time, the price will almost certainly drop, so consider having stops set.
  • Always consider that this is all a matter of probability, nothing HAS to happen the way one expects.
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CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

Rene Peters

Rene Peters

Rene Peters is editor-in-chief of CaptainAltcoin and is responsible for editorial planning and business development. After his training as an accountant, he studied diplomacy and economics and held various positions in one of the management consultancies and in couple of digital marketing agencies. He is particularly interested in the long-term implications of blockchain technology for politics, society and the economy.

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