Hello mates,
Cryptocurrencies are very volatile. Prices may change with every transactions in the blockchain. And for newbies like me, who have just jumped in into crypto space recently, the most significant knowledge is to be wary of the changes in each coin of choice, so as to identify good entry and exit points. While most of the time hodling is the key to success, for traders with limited capital, it is very critical to not be sinked in a dip having to wait for a week, a month or so for the prices to rise up.
As the rule of supply and demand, the price of a coin will always be dependent on the amount of circulating currency, so as the market capitalization increases, the price will eventually increase at a certain [fixed] percentage of the increased market capitalization.
Let's take antshares as example, (I know, why antshares, well... i am pretty invested with antshares and I believe that it does really have a future hehe). If you would look at the market capitalization history and the corresponding for each day, it does really have a fixed (with a minimum difference at some point) pattern.
Here is a sample pattern below:
PATTERN: MARKET CAP -- LOW -> HIGH
267M -- 5.09 -> 7.26
347M -- 6.49 -> 8.69
397M -- 6.75 -> 8.51
410M -- 7.77 -> 8.49
438M -- 7.74 -> 9.24
485M -- 8.60 -> 10.0
589M -- 7.87 -> 11.79
By writing these value patterns, we could easily know what to expect within the day, and not be impulsive by doing a panic sell when the price drops at a considerably low amount. We just need to check the current market cap to identify pump and dump changes in the price from a natural price valuation. If the market Cap is high, and the value has drop due to huge sells in a moment, but the market cap is considerably still, the value will bounce back again.
This is just a simple guide in analyzing rise and dip of a value, I may be wrong, and I am well opened to corrections.
Happy trading to all!
Cheers,