Basics of cryptocurrencies: necessary indicators of the assessment of cryptographic assets
In recent years, the world of cryptocurrency has recorded rapid growth and variability, and some assets have experienced explosive price increases, while others have fallen. As a result, investors and analysts must carefully assess the basic aspects of cryptocurrency assets before investing.
In this article, we will delve into key indicators that fund managers use to assess cryptocurrencies and ensure their importance when determining the value of cryptocurrency.
1. Market capitalization
Market capitalization (market capitalization) is a widely recognized indicator that represents the total value of overdue shares or cryptocurrency assets. It can be calculated using the pattern: the market capital = total supply / 2. This record indicates how large the market size is, and then how much liquidity is.
Market capitalization is necessary to determine the overall value of cryptocurrencies, because it affects the amount of turnover, interest of investors and market moods. For example, if the cryptocurrency has a high market capital, investors will be more likely to be interested in buying or selling assets, which can raise prices.
2. supply and demand
Supply and demand are key factors affecting the price of cryptocurrencies. The balance between buyers and sellers is crucial for determining whether the price of assets will increase or fall.
There are two main types of supply and demand:
* The demand driven by the seller : This is when investors willingly buy cryptocurrency at a low time, raising prices.
* The buyer’s buyer’s demand
: Conversely, if there are fewer buyers than sellers, prices tend to decrease.
Fund managers use indicators such as trading volume (TVL) of stock exchanges, capitalization of the coins market and profit price indicator (P/E) to assess supply and demand. High TVL points to the growing investor community, while low TVL may indicate decreasing interest in activated.
3. Volume of turnover
The amount of turnover is another necessary indicator that measures the amount of purchase and sale on the stock exchange. It provides insight into market moods, liquidity and price stability.
The high volume of rotation may indicate high demand for cryptocurrency, which can raise prices. And vice versa, a low volume of rotation may suggest a lack of interest in activist or increased variability.
4. Capitalization of the coin market vs. supply
The basic aspect to consider when assessing cryptocurrencies is their supply and demand ratio (SMDR). This record measures the difference between the capitalization of the asset market and its total supply.
If SMDR is high, it may indicate that there are more buyers than sellers, which can lead to increased prices over time.
5. Price ratio to profit (P/E)
The P/E indicator compares the price of cryptocurrency shares to profit for the action. This record helps investors understand whether the resource is undervalued or overstated compared to its peers and industry reference points.
A higher p/e indicator may indicate that the asset component is the subject of the bonus, while the lower indicator suggests that it is valued honestly.
6. Volatility
Variability refers to fluctuations in cryptocurrency prices in a short period. High volatility can be beneficial for investors looking for high return on investment.
Fund managers use indicators such as standard deviation (SD) of the daily trading volume or average time between price fluctuations to assess the variability of assets.
7. Technical indicators
Technical indicators provide insight into basic trends and cryptocurrency patterns. They can be used in combination with fundamental analysis to make informed investment decisions.
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