“Detangle the mysteries of the madness of digital assets”
The cryptocurrency market has been a wild driving in recent times, the fluctuating prices wildly and investors pursuing new trends such as a dog on a rope. But what is behind this volatility? Let’s dive into certain key measurements that could help you understand the dynamics at stake.
Total power supply: the occurrence factor
One of the most important indicators we can examine is the total offer of a particular cryptocurrency. This number tells us how many parts are still available to exploit, sell or exchange. At its peak, there were more than 21 million units on the market, but things have been decreasing rapidly since then.
According to CoinMarketCap, the current Total Bitcoin (BTC) offer is around 21,000,000 BTC. It’s true, friends – we are talking about a total supply that has decreased by around 40% in just one year! This means that there are fewer and fewer pieces available for minors, which in turn results in the request.
Bear market: when fish start to swim
But this is not all bad news. The cryptocurrency market can also experience bear markets, where prices drop and investors lose confidence. In these situations, bears (investors who sell their assets) lower prices, which adds many new parts to add to the market to try to resume part of the lost value.
A metric that helps us to assess the probability of a lower market is total market capitalization (CAP $ M). While more and more investors buy a particular cryptocurrency, its $ M ceiling increases. If a lowering market arrives, we can expect the ceilings to fall, which reduces prices and attracts even more buyers to try to recover their losses.
Market volumes: high -speed unsubscribe
Another crucial metric is market volumes. This tells us how many trading activities occur on the market at any time. When the volumes are high, this means that there is a lot of purchase and sale in progress, which can increase prices and increase costs for minors.
But what about bears markets? In these situations, we often see reduced market volumes as investors become more cautious and cover their bets. This can lead to higher transaction costs, slower payment times and even an increased risk of incident hacking.
A story of two measures
Although the total offer and the $ M ceiling are important measures, they do not tell us so much about the overall health of a cryptocurrency market. Market volumes provide valuable information on commercial activities, while the probability of a lower market is influenced by many factors, including the feeling of investors and global economic conditions.
While we sail in the agitated waters of the digital asset markets, it is essential to remain informed of these different measures and the way they interact with each other. By understanding what makes prices go up and how the different market forces influence the global trend, you will be better equipped to make intelligent investment decisions in this rapidly evolving landscape.
Sources:
- Coinmarketcap: Total Bitcoin supply (BTC)
- Cryptoslate: bear market indicators
- Coindesk: volumes and market costs