THIS is why some coins just DUMP "DUMPAMENTALS"

Boxmining

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Description

Sometimes cryptocurrencies just keep going down - "Dumping" - even though the fundamentals seem great. This is because it has strong dumpamentals - factors leading to strong sell pressure. In this vid...

Sometimes cryptocurrencies just keep going down - "Dumping" - even though the fundamentals seem great. This is because it has strong dumpamentals - factors leading to strong sell pressure. In this video we take a look at 4 types of dumpamentals and how they affect the market. 👍🏻Subscribe to Boxmining for Cryptocurrency Insight and News: https://www.youtube.com/c/boxmining 🔒Hardware Wallet: http://boxmining.co/ledger 👍🏻Brave Browser: http://boxmining.co/brave 📲Enjin Wallet: http://boxmining.co/enjin 👍🏻Unstoppable Domain: http://boxmining.co/unstoppable 📲Binance Exchange : http://boxmining.co/binance #Bitcoin #Ethereum #Cryptocurrency ●▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬● Telegram groups (Discuss Crypto with us!) Telegram Discussion Group: https://t.me/boxminingChannel Telegram Announcements: https://t.me/boxminingChannel ●▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬● ♨️Social (Add me on Social Media!) Instagram: https://www.instagram.com/boxmining/ Twitter: https://twitter.com/boxmining Facebook: https://www.facebook.com/boxmining Steemit: https://steemit.com/@boxmining ●▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬● I'm not a professional financial adviser and you should always do your own research. I may hold the cryptocurrencies talked about in the video. ●▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬●

AI Analysis

You know how some crypto coins just keep dropping in price, even when everything about them — like the tech or the team — seems solid? Well, it turns out there's a flip side to "fundamentals" called "Dumpamentals." These are the often-hidden factors that create massive sell pressure, causing a coin to "dump" even when it looks good on paper.

Here are the four key "Dumpamentals" that can send a coin into a death spiral:

* Human Psychology and Profit-Taking: This is super important for coins that have seen insane gains, like a 50x or 100x return recently. Ironically, the stronger a coin's price has risen, the stronger its "dumpamentals" become. Think about it: if someone bought a coin at 12 cents and it's now at $12, they've made a 100x profit! They genuinely don't care about selling it anywhere above their original 12-cent entry price. So, if a coin has gone up a ridiculous amount, you really need to question if it has the genuine strength to keep growing, or if the sheer number of people ready to take profits will overwhelm it and send it spiraling down.

* Insiders and Early Seed Investors: This applies a lot to newer projects, especially those that raised money through early seed rounds before a public Initial Coin Offering (ICO). These early investors often get tokens at deeply discounted prices, sometimes as low as 5 cents, while the public ICO might be at 30 cents or even a dollar. The tricky part is, these deals are often private contracts, not on the public blockchain, making it like a "spy game" to figure out. Investment funds will even call each other to "suss out" details like how much the earliest investors paid, how many tokens were sold, and, crucially, how long those tokens are locked up before they can be sold. If these early investors don't have a lock-up period, or if it's very short, they can sell their massively discounted tokens at any price above their entry, creating huge sell pressure.

Token Distribution Schedules (Vesting and Tranches): Not all projects release all their tokens to investors at once. Many use monthly distributions or "tranches," meaning investors get a portion of their tokens every month or over a set period (some projects even wait two years). This is especially scary when a coin initially lists with a very small circulating supply*. Imagine a coin trading at 10 cents with only 5% of its total supply in circulation, but you know there was a 1-cent private investment round. If the next month, another 5% of the total supply, consisting of those 1-cent tokens, is distributed to investors, the circulating supply essentially doubles with deeply discounted tokens. This creates an extremely strong "dumpamental" situation because those investors are very likely to sell their cheap tokens into the market, driving the price down. It's vital to research a project's token vesting and distribution schedules to understand when large amounts of new supply might hit the market.

* Miners and Newly Minted Coins: This applies to new coins that launch with "no pre-mine," meaning all their tokens are created through mining, like Grin or Zcash. At the very beginning, there's often a lot of excitement, but the supply is incredibly low. If miners are active, one day's worth of mining could double the entire circulating supply on the second day, and triple it on the third! This means miner sell pressure is really strong at the start of a coin's life because they're constantly selling newly mined coins to cover their operating costs. Over time, as more coins are mined (like Bitcoin, which has been mined for over 10 years), the relative "dumpamental" pressure from miners decreases because the new supply becomes a smaller fraction of the total circulating supply. Eventually, these coins find a "price discovery" point once the initial miner pressure significantly reduces, making it a potentially better entry point.

This miner pressure also helps explain what happens during "halvings" for coins like Bitcoin or Litecoin. A halving event means the number of coins mined per day is cut in half. So, if Bitcoin miners are currently selling about $20 million worth of Bitcoin per day to cover costs, after the halving, that sell pressure will drop to $10 million per day. This significant reduction in "dumpamental" pressure is why many speculators believe halvings lead to a rise in a coin's price.

Ultimately, these "dumpamentals" are critical factors to consider when evaluating any cryptocurrency project. By understanding these potential sources of sell pressure, you can make more informed decisions and avoid getting caught in unexpected price dumps, even for projects that seem fundamentally sound.

Transcript

Have you ever wondered why a coin goes down in value? Even though all the fundamentals look great. They maybe have good tech, maybe a good team, but why is a coin going down? Today we're going to talk about Dumplementals. And you're going to say, really, Box? You're going to make a whole episode on a word that you made up in Comic Sans font with a little poop sticker on it? That's absolutely right. And in this video, we're going to cover the obvious factors, the really very obvious warning sign...

Have you ever wondered why a coin goes down in value? Even though all the fundamentals look great. They maybe have good tech, maybe a good team, but why is a coin going down? Today we're going to talk about Dumplementals. And you're going to say, really, Box? You're going to make a whole episode on a word that you made up in Comic Sans font with a little poop sticker on it? That's absolutely right. And in this video, we're going to cover the obvious factors, the really very obvious warning signs of why a coin might be dumping to the not so obvious ones, like insider news, insider coins. And that's kind of a little bit scary and dangerous. And as with every video, everything covered here is my personal opinion, not financial advice. Let's get started. Dumplementals number one relates to human psychology. That is that people want to sell for more than they bought it at. So this is very, very important for coins that have done maybe a 50X or a 100X recently. So any coin that's going up, ironically, the Dumplementals are very, very strong. So the example that came into mind was, so a lot of people started talking about in January of 2017. And at that time, the price was $12. Now it's already done a 100X. People could be holding it. They could have bought this coin at 12 cents. That's kind of crazy, right? If you even think about it, 12 cents. So they don't really mind offloading it anywhere above 12 cents. So this is a situation where you've got to be very careful. So any coin that's gone up a lot of value recently, that's when you've got to look at, can it grow even further? And does it have the real strength to do so? Or are the Dumplementals going to overwhelm the coin and send it into a death spiral? Vegeta, what does a scouter say about his Dumplementals level? It's over 9,000! What? 9,000? There's no way that could be right! All right, number two relates to insiders in the industry. And this applies to a lot of newer projects that are coming out. Because new ICOs, they most likely raised money in the earlier rounds, trying to get the funding, trying to get the team up together in order to do roadshows, etc. to promote that coin. So they had to get the money somewhere. And those are usually from early seed investors, early insiders that discovered them and were able to buy coins at discount. For example, early seed round investors might even get coins at maybe 5 cents. And then it gets marked up in the ICO round to maybe 30 cents or even a dollar. So you gotta be really careful about what happens with those 5 cent tokens. Because those early seed investors, they don't really mind unloading it at any time above 5 cents. Now this is when things get really technical and it really gets to become a spy game. If these people sold tokens very early on, you don't really get to know. It's a very private deal. It's not on the blockchain. It might just be on a contract somewhere. This is where funds would try to call each other to suss out information. They'd be like, yo, yo, let's talk about project... How much did you get that for? You know, did you get it for 5 cents? 10 cents? 12 cents? And they tend to usually gather from multiple sources and try to piece together what the fundraising status was like. What was the cheapest token? How many were sold? And then more importantly, how long it's locked for. And if you want to learn a little bit more about what's happening in the insider investment space, I got a great talk that's on my Patreon channel right there. It's exclusive to all Patreon contributors. And it's a Binance conference talk between Dovi Wang of Primitive Ventures, Jamie Burke, Outline Ventures, Vincent Tso, FBG Capital. And we talk a lot about how information is being spread out and what's really happening in the insider space. So I recommend you checking that out. And also, of course, supporting my Patreon. Point number three relates to when investors get their tokens. So we acknowledge the fact that there are early round tokens for a lot of projects. You've got to research that out. But the other factor is when do they come on markets? When the complementos are coming? So not all projects give their tokens to the investors at once. Some wait for around two years. But others, what they do, which is very common in the space, is they have monthly distributions or tranches. So they release these tokens every month and then they give them to investors. This is extremely important when coins list with a small circulating supply. So when the circulating supply, say, let's say, for example, it's 5% circulating supply, the coins listed right now trading at 10 cents, but we know that there's a 1 cent round. All right. So that's where the complementos are coming from. And then maybe in the next month, there's going to be a 5% of the total supply being distributed to the investors. Now, this is a very scary situation. The complementos are extremely strong here because the next month, you're going to double the circulating supply, scary, and then you're going to double it with only 1 cent round tokens, even though right now you're trading at 10 cents. And lastly, we have dumplementos coming from miners. So this is really applicable to new coins that have no pre-mine that are just launching. So kind of examples that come into mind are the Mimblewimble coins like Grin. We also have Zcash. And what happens on early on is that when the coin first gets kind of introduced, there's a huge kind of momentum. Everyone's excited. It's a lot of energy going through it. And the problem is that the supply is so low. I mean, if miners just mined it for one day, then there's only one day worth of supplies on the market. On the second day, that supply is going to double. The third day, triple. So what we can say in this case is that the dumplementos are really strong at the start of the coin when it's first announced. And then it kind of gradually peters out. Say, for example, Bitcoin, it's already been mined for 10 years already. So most of the coins are mined out. And that dumplemental pressure, that decreases over time. So the dumplementos of miners, it really depends at what phase the coin is in. So at the start of a coin, when there's no pre-mine, very low supply, then dumplementos are high coming from miners. And then at the later stages, where almost like Bitcoin, when almost all the coins are mined out, then dumplementos become smaller and smaller of a factor. So what happened in the case of the coins they're talking about? Well, they did drop in value because of the strong dumplementos, but eventually they did find a kind of price, that a price discovery did complete. So this is where kind of, it would be a much better entry point when the dumplementos decrease a lot. Now, miner pressure also explains what happens during the halvings. So we know that Litecoin halving just happened and then Bitcoin halving is happening in less than one year's time. So when halving happens, that means that the supply of the Bitcoin's mine per day, that's going to decrease by half. So that sell pressure right now, the current price of Bitcoin, it's around $20 million of Bitcoin mined per day. And that would drastically decrease. That would decrease to $10 million once the halving happens. So the dumplementos really are going to be cut by half. And this is why there are speculators thinking, oh my God, that's going to lead to a rise in the price of Bitcoin. And guys, that's the video. It's dumplementos. These are the factors leading to a potential dump in the price of a particular currency from early investors that got very cheap coins or just because there's a mass rise or miners. If you have any other reasons or ways to look at it, leave a comment down below. I'd love to hear what you think about dumplementos as well. Do you think these points are valid? Does it really help you think about a particular project? Leave a comment down below. I'll really love to find out. And of course, if you guys are new to this channel, make sure you click the little subscribe button right down there. Do it right now. And the little notification bell on the side as well. That really helps you get you really informed of all the latest videos I'm publishing. And I'm doing a lot more of these educational, fun videos talking about why things happen and giving you guys this insider look into what's happening in the cryptocurrency space. So make sure you're subscribed. Guys, thank you guys so much for watching. See you next time.