A Guide to Understanding Cryptocurrency Market Data and Volatility: What’s This Whole Confusion About the Market Cap?

Cryptocurrency is a complicated market to understand, primarily because it is still in the growing phase and every day some new trend or market insight breaks the previous norms. However, if you dig deep you will find that every industry more or less operates in the same way and there are certain constants which you can hold a grip on to understand its functioning.

To understand and catch the right grip on the movement of the industry we need to understand the relation between market capitalization and the currency in supply. Now, the market cap of a coin is its perceived value in the market. It is the multiplication of the number of coins in circulation and the cost of a single coin at the moment. learn more about Bitcoin Circuit here.

Trading the crypto market

Now, it is important here to understand that we take the supply in circulation at the moment to calculate the market cap rather than the total supply of the coin. so, now that you understand the market cap, you are in a better position to make an insight about the market situation by reading the data of the same.

Get closely intimated with the market

A lot is happening in the market every single day and your sole agenda is to keep an eye on these movements. You cannot even go a day without reading news and articles about market trends and movements. Once you lose touch, you will lose your bet and position. The market data is the most important source of information for any newcomer who wants to make something big out of it. It helps you get closely intimate with the market and get a tight grip on its data.

More than staying informed it’s about understood the market, what triggers a movement, what causes price fall, when to predict a price rise etc. this only happens once you start digging deep and that’s when you start making your market insights. Many professional investors are successful for this reason alone that their understanding of the market is exceptionally precise and that’s what always lands them in profit.

Have your role model and follow them closely

If you are new to the market no amount of data and information is enough to give you enough courage to make the call all on your own. It doesn’t work like this. It takes years of knowledge, practice, and experience to get there. While on the other hand, a shortcut is to have a leader which you can rely on and fall back on.

They have been in the market for years and their knowledge of the same is almost unbeatable and unmatched. It’s a great way to get started with trading if you found your role model who you think could guide you through this journey. Although, it is not advised to follow them blindly what you can do is combine your knowledge and understanding with their expert guidance and experience and then you are Golden. This way you will get more confidence in the decisions and you will play safe and sound.


Diversify your portfolio

Just like any other market, Crypto is not the one where you should lay all your bets in one pool. It’s dangerous, it’s not wise and it’s impractical. Instead, your approach should be to diversify your portfolio and put your money in a variety of coins. Though at the moment only Bitcoin indeed seems to be the king, there are other currencies too which are doing well and in the long-run will give close competition to Bitcoin.

This also means that if you are in a losing position, you won’t lose all that you have in one shot. If you have put your money in different coins you will be safer from some sides at least. This also means that you should keep investing in other industries too like stocks, real estate, gold, and commodities as Crypto is a highly volatile and unpredictable market and you don’t want to put all your money in an industry like this.

Handle the volatility wisely

The market is highly volatile and that’s its beauty, this is what makes it trade fascinating and risky all at the same time. While it’s very difficult to understand or predict market movements with utmost precision but what you can do with certainty is stay prepared for the same. The first step to that is to practice emotional control and leave the panicking behind. Because the market will give you various reasons to panic on day to day basis but you have to overcome that and handle volatility in a better way.

This means you have to stay away from impulsive and whimsical decisions and keep your focus on long-term profits. You have to look at the bigger picture and understand the trade-in context of the global scenario and this shall keep you away from rash calls.