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The crypto market is an interesting space. New tokens can make major gains and cause a buzz in the market despite these projects failing to state whether they have any actual use cases. The allure of new tokens is on the gains they make in such a short time.
One of the latest additions in the crypto space this month is Omicron. The Omicron token (OMIC) was launched around mid of this month, but the explosive gains it has made in such a short while have made it one of the most popular tokens in the market.
Data from Coingecko shows that the token made a staggering 800% price gain in just one month. During this time, it has reached an all-time high of $689, achieved on November 29, which is a notable gain from the $48 it was trading at on November 19.
So, what is the Omicron token, and is it a good time to invest in it?
About the Omicron (OMIC) token
As aforementioned, OMIC is one of the latest additions in the crypto sector. It is a fairly new token, and within the short time it has been in the market, it has made headlines and created much interest.
The reason why the Omicron token started gaining was the similarity of its name to the new Covid-19 variant named the Omicron by the World Health Organization (WHO). However, there is no evidence to show that this token is related to the Covid-19 variant.
Therefore, the gains that this coin has made could be attributed to mere hype. Normally, when occurrences outside the crypto market mention a specific token, that token tends to see notable gains despite a lack of correlation between the two.
Mostly, the gains that are contributed by hype arise from short-term traders who want to feed off the hype and make profits within the short time that the hype will last. Therefore, the OMIC token gains were caused by increased interest from retail investors who wanted to benefit from the short-term price gains.
The hype behind the OMIC token is similar to what happens with meme tokens. Usually, when a meme token is mentioned by a major player in the crypto sector, retail traders hurry to buy more and dump later for profits, which is what is happening with the OMIC token.
The other factor investors evaluate before investing in a token is whether it has any underlying project that could give it a real use case. The website of this token states that it is a “decentralized treasury-backed currency protocol. However, as it is still new, little is known about the potential of its blockchain technology.
CoinGecko, a price tracking and analytics platform, has very little information about the OMIC token. The platform has no information about the total circulating supply of OMIC tokens. Moreover, there is no information about the market capitalization of the token or the market cap ranking.
The lack of information about this token could be because it is still yet to establish itself in the market. However, this could be a red flag for the token because an investor has no adequate statistics to analyze whether OMIC is a good investment or not.
Is OMIC a good investment?
With an 800% price gain in just a few days, an investor could be tempted to make an investment in the OMIC token. However, there are several factors to evaluate if OMIC can sustain its gains in just a short while.
The 800% price gains made by the OMIC token were when it reached an ATH of $689. However, like most tokens that make explosive gains in such a short while, it could not hold those highs.
Currently, data from CoinGecko shows that the OMIC is trading at $269. This is an almost 70% dip from its ATH. When a token makes major gains without having any strong technological and market backing, it fails to hold those gains for a long time.
While an investor could be tempted to buy during the current dips, it could lead to losses because the hype is slowly dying down. OMIC gained because of the similarity of its name with the COVID-19 variant, and because news of this variant is dying down, so will the hype around the OMIC token.
Currently, the OMIC token is on a downward trend, and the dips could continue intensifying in the coming days. In fact, all the gains it has made could be wiped out in a few days because of selling pressure. Traders who bought during the bullish rally could start selling because the trend is reversing. Selling pressure could harm the prices.
It does not make a good investment currently because history shows that new coins that gain explosively because of hype usually crash. For example, the SQUID token that derived hype from the Squid Games TV show crashed by almost 100%, and investors made massive losses.
Therefore, it is good to be cautious about making an investment in OMIC, given that the price is currently dropping, and there is no strong factor besides buying support, which is fueling its rally.
Moreover, the OMIC token is only available on SushiSwap, and it has not been listed on any major exchange. This means that an investor who wants to invest in this token will have to create an account on a DEX, which might not be convenient to many and could be attributed to the low trading volumes.
Moreover, there is also the possibility to consider that the lack of listing on a major exchange could be a red flag. Major exchanges list tokens that have stayed in the market for long, and they have established base. So if you are a cautious investor, it is best to wait for this token to be listed on a major exchange, as this is the only way it could hold its strong price performance.
However, once the hype cools down, it could be worth researching the blockchain technology behind this network and what it seeks to solve. If it has a competitive edge in the market and has a solution for the financial sector, then it could resume a strong bullish rally in future, which could be more sustainable than the current one.
As aforementioned, this token is one of the new ones in the market, and therefore, the development team could soon publish a whitepaper on the project and the roadmap to ensure that the OMIC token gains utility. With a strong development team, the token could gain adoption for real use cases.
Omicron made a staggering 800% price gain in just a few weeks. While it has gained much interest because of these gains, many investors are now cautious about it as an investment choice because it has fallen 70% from its all0-time high of $689.
Currently, the price-performance shows that OMIC could be headed towards a stronger bearish trend and erase all its gains in a short while. However, as it is still a new token, the crypto market is waiting to see if its development will have any real use case. There is also a possibility that due to all of the trading taking place on one decentralized exchange that wash trading is happening, and that the token has had its price manipulated.