The crypto market is a dynamic ecosystem that operates 24/7, unlike traditional stock markets, and allows trading of cryptocurrencies and their derivatives. Its total market capitalization, or “market cap,” represents the combined value of all cryptocurrencies in circulation.
Cryptocurrencies are backed by blockchain technology, which is a decentralized ledger that records all transactions and their participants. Its use cases extend beyond payments and include storing records, managing supply chains, and providing financial services.
Investors in the crypto market must be aware of their unique dynamics, including volatility, technical complexity, and security risks. Investing for the long-term requires thorough research of real-world adoption potential, technical specifications, and founder and developer experience. Consider rebalancing your portfolio from major coins to promising newer projects with greater growth potential.
Regulatory changes, news, and trends are significant drivers of crypto price movements, both up and down. Favorable regulations may boost confidence and fuel price increases, while unfavorable ones may dampen demand and push prices lower.
The crypto market’s liquidity varies by exchange, with some offering tighter bid-ask spreads than others. This influences the execution of trades and the level of risk involved in a given transaction. Investors in the crypto space should also stay abreast of mining efficiency and power consumption, as these can significantly impact a cryptocurrency’s price, as well as its environmental footprint. Tried-and-true technical indicators like moving averages and their crossovers, and crypto-specific metrics like mempool size, transaction fees, addresses by time held, and on-chain activity, can help identify momentum shifts.
About the Author
