Coin Market Cap: Basics for Beginners - Eaglesinvestors

Coin Market Cap is one of the most useful websites that summarises the cryptocurrency market. In this article, we will go through some basics of how Coin Market Cap works.

Some of the most significant information to know when considering cryptocurrency investment is the market cap. (which is the total coins in circulation in relation to current price), price (in a fiat currency such as USD and major crypto like BTC), the volume (fiat value of the currency traded in a day), supply (of coins circulating), social media buzz, and the exchanges it trades on. And yes! Coin Market Cap.com displays all of that! Which is why it is without a doubt the most popular cryptocurrency based site?

NOTE:

coin market cap

One thing you need to understand is that Coin Market Cap.com (CMC) is not an exchange. It is merely a resource that assists you in finding coin prices and markets on which to trade precise crypto pairs. It is one of the most popular crypto resources available online as well.

Although it’s not an exchange itself, as soon as you click the “buy” button on any coin’s page you are directed to changelly.com (which is a kind of exchange). Nevertheless, CMC is a vital resource that goes hand-in-hand with any exchange.

How to Use Coin Market Cap

Right off the bat, the focal page to look at is the Cryptocurrency Market Capitalizations of All the Cryptocurrencies (the home page).
This page has a list of the market cap, volume, price, supply, a 24-hour price change, and a graph illustrating that price over 24 hours.

Market cap

– it is the total coins that are in circulation plus the current market price.

Price

– It is the average market price across exchanges at that present moment.

Volume

– is the fraction of a coin was traded in the past 24 hours.

Supply

– is the number of coins in existence (multiply it by the price, and you get the market cap).

coin market cap

When looking at a coin, you want to look at market cap for a summary of its value (because this number dodges having to deal with figuring out not only the value of a coin but also the value of a coin in comparison to how many are circulating altogether.

Price is somewhat self-explanatory, great when it goes up to sell, good when it goes down to buy.

Supply offers you an idea of how limited the present supply is (but not how many could be created in total. You will need to research that per coin.

The 24-hour volume, as well as change, show you how the coin is performing currently. Is it in a dip? Is the volume worse than it usually is? These metrics assist you in timing buys and sells.

So that is the essence; you can tweak the parameters by playing around with dropdowns above the list.

Let’s take for example if you click on Ethereum (on Coin Market Cap)

coin market capWe will see a chart with a ton of lines crossing over each other so to speak. The orange line that you will see on the chart is the price in Bitcoins. Bitcoin has a tendency to go up, so the relative price of everything in Bitcoin is down. However, Don’t allow that to throw you off, nonetheless do deliberate the trajectory when trading between coins.

The blue line represents the market cap, this matters for the reason previously mentioned. A coin that has a growing market cap is a coin that is generally doing well. (as the price rises, or the supply declines).

The green line represents the price in USD, which should be the most noticeable.

The volume chart (Coin Market Cap)

If the volume is quite high and the market cap is rising on average, it means the coin is doing well. In the meantime, you should expect all coins to be relatively low compared to Bitcoin.

Furthermore

You may want to know about the tabs above the chart on a particular coin’s page. It shows social media buzz and the exchanges it is traded on (below the markets tab). It also displays what cryptocurrency pairs you can trade (such as ETH/BTC or ETH/USD).

Now that you have these basics other information concerning the site should be pretty easy.

5/5 (2 Reviews)

Leave a Reply

Your email address will not be published. Required fields are marked *

*

everfx
close-link
close-link