A few vendors can eliminate Meme Coins in minutes

Perpetual futures contracts may amplify volatility by forcing leveraged traders to liquidate as prices begin to fall.

Longtime cryptocurrency trader Ogle warned on July 13 that small cryptocurrencies with limited liquidity could collapse within minutes when a few of their large holders decide to sell.

Pointing to recent losses around the industry’s newest sensation, CASHCAT, the market watcher reiterated the risks in chasing fast-moving tokens, as paper gains can disappear very quickly when leverage, weak markets and concentrated ownership collide.

Why can a few portfolios move the entire market?

In a post on X, Ogle did groundwork note About this market: A lot of people get hundreds of thousands, and sometimes millions of dollars in winnings that they never actually cash out. According to him, if two or three of these traders sell, it will lead to a significant price drop, especially for smaller meme coins.

“When a large number of people make hundreds of dollars or millions of dollars in a token, unrealized, in this type of market, it only takes 2-3 of them to sell (if the token is small, especially a meme with little liquidity) for everything to collapse quickly,” he wrote.

The problem becomes worse if the token is listed on perpetual futures exchanges, where traders often borrow money to place large bets, the analyst explained.

He gave the example of CASHCAT, the meme currency built on the Robinhood chain jump More than 3,200% over the past week and briefly raised its market capitalization to around $226 million about a day ago when its price reached an all-time high (ATH) of $0.2288 according to CoinGecko data.

According to Lookonchain, the rally saw a few winners, including one trader who bought 15 million CASHCAT tokens for about $838 and turned that into a profit of over $1 million. However, if they had waited a few more days, they would have received nearly $2.9 million. Another trader spent $69 and sold for $711, which, although representing 10 times his investment, would have been worth $2.7 million had he also waited.

However, things may also have gone south for these traders, as, as Ogle noted, the asset saw some pretty significant liquidations, which came right after the launch of a perpetual contract on Hyperliquid.

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Data from CoinGecko shows the value of CASHCAT It crashed By about 60% with about 90% of long positions liquidated, which increases selling pressure and volatility. At the time of writing, the memecoin has made some recovery and is trading just below $0.16, although this price still represents a drop of more than 18% in 24 hours, pushing the coin more than 30% below its ATH.

Utility tokens versus short-term meme bets

In his post on

According to him, these investments are slower processes and require patience, and many traders often lose interest before the assets can generate greater returns.