A few days ago, the XY Oracle devs released XYO 2.0 which came with a laundry list of new developer features that expanded the functionality and use of the location-driven blockchain.

The project itself is inspiring and massive. XYO is one of the largest blockchains in existence, operating over 4 million nodes worldwide. Unlike many other blockchain projects, XYO has a finished product that’s already in full use. Other projects like Chainlink and Cardano have been stuck in research and development for quite some time – but their price action on the crypto market has been vastly outperforming XYO. Let’s look into why.

News of XYO 2.0 saw a ~17% pump in coin price only to see it completely retrace a couple days later.

Zoom out and you’ll find that XYO has been on a steady, slow-bleeding decline with some minor pumps on the way down. Plagued by lower-highs and lower-lows compounded by the altcoin’s sensitivity to Bitcoin price action, XYO is now trading at below $0.02.

Why does such a great (and finished) project have such horrible looking price action?

XYO is stuck in what I like to call “penny coin” mode. And retailers are trading it like one. The real breaking point for XYO’s price was it’s second pump after it hit all time high coupled with the December 4th Bitcoin dump that liquidated a huge chunk of the total crypto market. That’s where the coin lost its momentum.

Investors “hodling” millions (or even billions for that matter) of dollars in crypto are not likely to dump their hard earned cash in a volatile penny coin that’s been trending only down, particularly when they see a chart like the one above. Instead, they’re far more likely to hold Bitcoin or Ethereum where swings in prices aren’t “spiked” like they are on most other altcoins like XYO.

XYO has partnered with a slew of other companies and institutions to expand awareness and use of their product, but price hasn’t particularly improved. XYO needs massive, new, long-term investment to repair its price action.

Coins don’t magically pump just because RSI is low or they’ve completed a symmetrical triangle. They don’t pump because volume has been low and you “feel” a spike in price coming. This is wrong thinking for two reasons:

  1. Prices go up when investors buy stock and stock supply is low – not when some lines you drew on a chart come to confluence.
  2. Spikes in prices are generally correlated with shitcoins and scam coins.

So just because XYO looks like it bottomed out at $0.018, doesn’t mean it can’t go lower. Traders made that argument at $0.03 and we’ve dipped 50% below that to-date.

Coins that randomly spike aren’t signs of good price action. It generally means the coin’s volume has died and is waiting for a whale (or in most cases a large tune – traders with hundreds of thousands of USD instead of millions) to pump the value of the coin in increments. Low market cap, low volume coins are generally targeted as they contain holders looking for a reason to stay invested or desperate retailers looking for an exit. Both are trapped into thinking the coin is finally “turning around” so they add a little more cash to ride the wave until the “whale” places a sell order at the right time and dumps the price, effectively stealing cash from holders.

My favorite example of this is DDX – listed on Coinbase – victim of scam pump after scam pump followed by lower-lows.

Optically, XYO looks similar and that gets large investors nervous; why hold money on a coin or project that’s making lower-lows after massive new investments? Coin holders that entered near all-time-high levels are also probably looking for exits at the nearest opportunity.

Ultimately, if this coin is going to make it, XYO devs need to do a better job regulating their coin’s supply to steadily increase value. Moreover, inviting larger investors and offering staking options would help keep holders “hodling” instead of looking for exits after every pump. The project could be partnered with Amazon for all I care, but how many average people are aware of XYO? And want to invest in it? And risk a portion of their savings account in it? What large investors are going to hold shares with charts that look like a weeping willow tree?

By BM

Civil Engineer // Aviator // Photographer // Avid Coffee Enthusiast // Not financial advice - Just observations

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