The Secret Zone Where Dead Coins Come Back To Life

Written by Jason Krutzky, Chartered Meme Technician at Spot Trading.

Howdy, gang!

As the guy with a Technical Analysis background here at Spot, I'm often asked by my colleagues to explain different concepts to help them understand how to read a chart more proficiently.

Recently, I was explaining the various steps of one of the key patterns I look for, and it was suggested to me that the lesson I gave should be turned into a blog post, so here we are. 

In this note, I'm going to show you another way to use Fibonacci sequences; Specifically, to help you understand if the coin that you're down mega on is going to come roaring back to life or not. 

Let's dig in.

The Setup

You're in a hot coin that just recently caught a big bid. Maybe it's new, maybe it's been around a while, but the hype train is going crazy, everyone on your timeline is rushing to buy it, and you're feeling massive FOMO. 

It's already gone on a huge run, but it feels like there's more gas in the tank, so you say 'fuck it, let's gamble' and you deploy some cash. 

Initially, your timing looks perfect—you're riding the wave. You put your phone down feeling good, then check back an hour later to find you're down 5-10%.

No big deal, you tell yourself. Just needs time.

Next check: down 30%. Shit.

But you hold. It'll bounce back, right?

Next check: down 50%.

This is where despair starts creeping in. The coin feels like it's heading straight to zero, but you can't bring yourself to sell.

Another check: down 75%. Now you're convinced it's completely dead. You finally capitulate and take the massive loss.

And then—because the market loves to torture us—right after you sell, the damn thing reverses and climbs back to your original entry point.

That 75% realized loss could have been a breakeven trade if you'd just known what to look for.

The Accumulation Zone

If you have any background in traditional finance, you've likely heard about accumulation phases in market cycles.

The idea behind accumulation is that after a significant selloff, smart money begins to quietly build positions at deeply discounted levels. This creates a floor where the asset finds support, even when retail sentiment has turned completely bearish.

The same principle applies in the memecoin space, though the timeframes are compressed and the volatility is amplified.

If a coin saw a lot of volume, which pushed the price to a decent market cap, it's likely to eventually find buyers if it falls enough.

The secret zone where dead coins come back to life that you want to be looking for is the area between a 78.6% and 90% drawdown, measured between the start of the big push and the high.

Let's look at a few examples.

The Secret Zone Where Dead Coins Come Back To Life

A really clean example of this idea can be found on the OG, $PEPE. Before it went on its monumental run to over $10B market cap, it started with an initial launch move that lasted for several weeks.

Once that move was exhausted, it went into a prolonged consolidation period where it very easily could have faded slowly to zero. 

However, instead of flat out dying, the coin found support in the dark blue area, between the 78.6% and 90% Fibonacci retracement from launch open to high.  

Finding support in that zone laid the groundwork for the huge move it went on to see over the next year.

Another clean look can be found on $USELESS. 

This name took a lot less time to develop its base than $PEPE, but the same idea holds. 

We saw the initial move over the first week that brought it up to about a $40M market cap. This is the section of the chart that we measure the fibs on.

Then, we got a multi-week sell-off down into the dark blue zone between the 78.6% and 90% retracement levels.

Support was found there, and price reacted accordingly, sending back to all-time highs and well beyond. 

Sometimes, the initial push doesn't happen on day one. That's ok, this idea still works. Take $AERO, for example.

It had over a month of price action before buyers came in, pushing it from $.09 to $2.30 in just seven sessions. 

This was a huge move that required some consolidation, but where did buyers step back in after that initial lift?

Again, in the dark blue zone between the 78.6% and 90% Fibonacci levels.

Names Setting Up Like This Now

I know what you're probably thinking. 

"This is great info, Jason, but all these moves have happened. What names are setting up like this now?"

Well, I've got a few for you. Let's look at some of them. 

First is $GP. 

I think that if this one is going to live on and make a move back towards its all-time highs and beyond, it needs to dig in and find a bottom here. 

There's no timeline for how long it needs to stay down here. It could take a few sessions or it could take months, but if it's going to live, I think you want to see it hold in this area. 

BUY $GP

Another name that's got this look is $ANI. 

There's not much to say here, except that it's in the zone where it should bounce. If it loses this zone, that's probably it for this coin.

BUY $ANI

$GOR also has the setup.

After dipping slightly into the dark blue zone in mid-July, it has continued to consolidate just above it for the past month. If it can't push below the zone, eventually sellers will give up, and buyers will regain control.

It's just a matter of time. 

BUY $GOR

The Takeaway

The truth is, there are a lot of setups like this out there. The three I've highlighted above are just a few that I'm personally monitoring. I encourage you to go out and do some hunting on your own. I guarantee you'll find many more just like these. 

The next thing that I think is important to say: I don't really know why this is the zone that seems to work. It just does.

My guess is that there's always someone in the know, and if a good coin has sold off enough, there will always be sharps there to support the price until it can regain its footing and continue higher.

Finally, there are exceptions to this rule. Coins can completely die and still come back to life. We saw this recently on $CLANKER. 

This name was dead dead. Notice that it cut straight through the zone on the way down, tried to get back above it and failed, and then hibernated for months before absolutely sending over the past few weeks. 

There are always exceptions to the rule. There will always be unknown unknowns that can affect a coin's trajectory in unexpected ways.

Best to just be patient, know your levels, and risk what you can afford to lose, every time.