All together, try to keep in mind that a low volume / market cap ratio usually tells you its riskier to invest in a coin since its harder to sell or buy. We may receive a commission, at no extra cost to you, if you click through our links and make a purchase from one of our partners. When the crypto industry learned that Tesla purchased Bitcoin last year, it led to a spike in Bitcoin trading volume. Events For example if the total cryptocurrency market cap is $100 billion and the market cap of Bitcoin is $55 billion, BTC dominance would be 55%. (Learn more about tiers and how we rank coins in this article.). In Cryptocurrency Market Capitalization you can see the top crypto currencies. Access exclusive reports by CoinGecko analysts! In addition to tracking price, volume and market capitalisation, CoinGecko tracks community growth, open-source code development, major events and on-chain metrics. But that accounts for slightly above three percent of its volume. As a rule of thumb, yes. Is this an indication of a bubble or a great opportunity. We make no warranties of any kind in relation to our content, including but not limited to accuracy and updatedness. Calculating How important is the ratio of volume to market cap in crypto? While this can work well in an up trending market, in a down trending market the results can be disastrous. We are crypto enthusiasts and our main intention with Coin Guides is to educate people about Cryptocurrency and Blockchain technology. Celebrate the Launch of the Phemex Web3.0, Low fee, Buy&Sell, Fiat currency settlement, One-stop platform to make money with your crypto assets risk-free. In the case of Bitcoin, its 16.4 / 21 = 0.78 or 78%. We describe the assets tracked in this chart as cryptoassets because it includes tokens and stablecoins. Other indicators such as the OBV and MFI indicators can give us context for the relation between volume and price. Its similar in cryptocurrency, except cryptos dont represent equity in a company like stocks. We explained that a high ratio tells you a coin is liquid, indicating a more stable market. If we want to ensure weve invested in a quality project with a lot of liquidity, we should choose a crypto with a billion-dollar volume that will always have liquid backing. Market Capitalization is what determines the value of a coin. Before getting into trading Crypto currencies you must first understand the significance of market cap, supply and volume. This is, of course, highly speculative on BTC remaining dominant in the sector and no other coin becoming more in demand between now and then. The main reason volume peaks during crashes is because a portion of traders are panic selling, while other traders are Dollar-Cost-Averaging (DCA) and accumulating in the crash. For example, in the case of Bitcoin, when a Bitcoin is traded at $10,000, we multiply that by its total circulating supply, 16.4 million coins, to generate an approximate market cap of $164 billion USD. We regularly publish content about Bitcoin, Ethereum, Altcoins, wallet guides, mining tutorials and trading tips. The volume / market cap ratio is another useful indicator for making your investment decisions. Market Cap: $114,232,367,790 Blockchain Education Lyft was also heavily traded, and there is an explanation to that: it is a hyped stock at the moment, having very recently listed in a high-profile IPO. If a new crypto launches and is listed on an exchange such as Phemex, it receives exposure from a new audience and that leads to a spike in trade activity & volume.
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