Trend reversal of PAL and LEO token: A lesson on volatility

Few weeks back, LEO was flying high and flirting with 0.3 Steem and on the other hand, PAL was drowning and reached low as 0.03 Steem. On that time, one LEO could buy 10 PAL.

However, LEO hit a ceiling and since then it was descending pattern. It has lost more than 50% of its value and trading at bid price of 0.135 Steem. On the other hand, PAL is trading at 0.09 Steem and a week back it was 0.13 Steem too.

PAL has gained 300% value from its all time low. The reason behind PAL's outstanding recovery is obvious. There is another airdrop on PAL holders from the PAL sell wall. It means that holding PAL will earn more PAL.

On the other hand, high price of LEO have attracted traders, airdrop beneficiaries, some big holders to sell LEO. It created pressure on the remaining buy walls. According to my estimate, in last month as many as 50K LEO was dumped by the big LEO sellers.

Interestingly, if somebody who have sold LEO at 0.25 to 0.3 Steem and bought PAL at 0.03 to 0.05, potentially could have made 10000% (10x) to 5000% (5x) profit. A $100 investment could become literally $1000 or $500.

For example, traders who bought 1000 LEO earlier at 0.1 Steem for 100 Steem, then sell near the peak at 0.3 Steem for 300 Steem. Then they bought 10K PAL for 300 Steem and then sell 10K PAL at 0.1 Steem for 1000 Steem. It is theoretically 10X profit trading between two tribes.

However, there are some caveats buying and selling 1000 LEO may not be an issue for LEO since volume is decent enough. But PAL volumes are not enough to easy entry and exit with 10K PAL without paying slippage cost.

The reversal of trend of both LEO and PAL tokens shows us the glimpse of future trading opportunities with tribe tokens and SMTs. When there will be 10X or even 100X users of these tribes or SMTs, then such opportunity will be more available. Probably, the volume will be more liquid to even trade 10K LEO or PAL without paying much slippage cost.

However, with in month or two the reversal trend shows us potential 10X gain in trading with two @steem-engine tribe tokens. The future is definitely exciting with more users and more features such as shorting or margin trading.

Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions. This opinion is only for educational purpose.

Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.

Thanks for reading.
@dtrade
Cryptominer , occasional trader and tech blogger since 2013