The crypto market is a global, decentralized digital asset trading system. It operates 24/7, enabling access to traders from all over the world regardless of their time zone. The crypto market is characterized by high volatility and is subject to fraud, dishonest practices, theft and more. Investors must always approach it with caution, only allocating speculative capital they can afford to lose and utilizing sound risk management strategies like dollar-cost averaging into positions.
Cryptocurrency prices are influenced by many factors, including market sentiment and news, which can lead to rapid price changes. Positive news, such as regulatory approval or technological advancements, can drive prices up while negative news, such as security breaches or regulatory crackdowns, can cause prices to decline. Large traders, often referred to as whales, may also influence prices by buying or selling significant amounts of cryptocurrency, which can push or pull prices in their direction.
Coin market cap, a ranking of the top-valued cryptocurrencies by market capitalization, is a key metric for investors. This metric takes into account the total number of coins in circulation, which excludes those that are reserved or locked and not available for trading.
Trading volume is the number of cryptocurrencies traded over a given period, and is an important indicator of market activity and liquidity. High trading volumes suggest that the market is active and there are many buyers and sellers. Low trading volume, on the other hand, indicates a less active market.