** Cryptocurrency Fundamentals: essential values for assessing crypto criticism
The world of cryptocurrency has recorded a rapid increase and volatility in recent years, some assets that undergo explosive prices rises while others have decreased. As a result, investors and analysts have to carefully evaluate the basic aspects of cryptocurrency value before investing in them.
In this article we will deepen the most important values with which fund managers rate cryptocurrencies and give an overview of their importance for determining the value proposal of a crypto.
1. Market capitalization
The market capitalization (market upper limit) is a large metric that represents the total value of the outstanding measures or coins of a wealth value of cryptocurrencies. It can be calculated based on the formula: Markt head = total offer / 2. This metric offers an indication of how large the size of the market is and then how much liquidity is.
Market capitalization is of essential importance for determining the general value of a crypto, since it influences the trade volume, the interest in investors and the feeling of market. For example, if a cryptocurrency has a high market limit, investors are more interested in buying or selling the financial value, which can increase prices.
2nd request and offer
The supply and demand are critical factors that influence the price of cryptocurrencies. The remaining amount between buyers and sellers is crucial to determine whether the price of an asset increases or decreases.
There are two main types of supply and request:
* Seller -Base -Base demand
: This happens if investors want to buy a cryptocurrency to their low point and increase prices.
* Inquiry based on the buyer : Instead, there are fewer buyers than sellers, the prices usually fall.
The fund administrators use values such as the trading volume (TVL) of stock exchanges, the capitalization of the currency market and the price price rates (P/E) to evaluate the offer and request. A high TVL shows a growing community of investors, while low TVL may be able to indicate little interest.
3. Commercial volume
The trading volume is another essential metric that measures the amount of purchase and sales on a stock exchange. Offers information about market feeling, liquidity and prices.
The high trading volume can indicate a strong demand for cryptocurrency that can increase prices. In contrast, the reduced trading volume can indicate a lack of interest in the asset or increased volatility.
4. Market capitalization of vs. deliver
A fundamental aspect that must be taken into account when assessing cryptocurrencies is your offer and demand report (SMDR). This metric measures the difference between the market capitalization of an assets and its overall offer.
If SMDR is large, it can indicate that there are more buyers than sellers, which can increase prices over time.
5. The price-chry ratio (P/E)
The P/E report compares the price of a cryptocurrency with its income per action. This value helps investors understand whether an asset is underestimated or overrated compared to his colleagues and industry benchmarks.
A higher P/E report can indicate that an asset acts with a premium, while a lower report indicates that it has a fair price.
6. Volatility
Volatility refers to fluctuations in the prices of a cryptocurrency in a short time. A high volatility can be an advantage for investors who require high yields for their investments.
The fund administrators use values such as the standard deviation (SD) of the daily trade volume or the average time between price changes to measure the volatility of a financial value.
7. Technical indicators
Technical indicators provide information on the basic trends and models of cryptocurrency. These can be used in connection with the basic analysis to make expert investment decisions.