Most people think that an altcoin season needs billions
The answer: No
Imagine: Market cap of 10 million
Price: $10
Do you think it needs 10 million to reach $20?
Never just $500k
Selling 200k of the coin crashes its price to $5?
No one explains this to you
This article will completely change your perspective @GiveRep
It doesn't matter how long you've spent in the crypto world, many still ignore a very basic point:
How liquidity really works
And how much money is needed to move or drop the price of a digital currency?
This ignorance can cost you a lot (and perhaps has already cost you before). Let's explain step by step, leave a comment and follow 💯
1. Basic concepts:
To understand the growth of a coin or digital asset or even a stock, you must know the difference between:
Market Cap
Fully diluted market cap (FDV)
Liquidity
Token Unlock Schedule
Market cap = Current token price × Circulating supply
But don't confuse market cap with FDV.
FDV = price × total supply (even if not launched yet)
This difference is unknown to many beginners, causing them to be the liquidity that early investors (VCs) exit with at each new unlock.
2. Why are FDV and unlock schedules important?
Some projects launch tokens monthly that equal twice the current supply!
The market cap may seem low (e.g., 10 million dollars), but the real FDV might be 200 million.
With each new unlock, supply increases and presses the price down.
Example: $APT launched with 130 million circulating tokens out of a billion, and with each unlock came huge selling pressure.
Even though the market cap seemed 'cheap' at 500 million, the FDV was over 4 billion.
In summary?
Always check unlock schedules - sometimes you think you entered early, but you are just 'exit liquidity' for others.
3. Liquidity: The real axis of price movement
This is where the fun begins.
Many think:
Coin X is priced at $1 with a supply of 1 billion = 1 billion market cap.
To raise the price to $2, do we need another billion? Completely wrong.
Liquidity is the most important factor.
Liquidity means the ability to sell or buy at the current price without significantly impacting the market.
A coin with a billion market cap but only 30 million in liquidity can double in price with a buying pressure of just 15 million - not a billion.
And similarly, it can crash just as quickly if a sale of the same value enters.
4. A real-life example:
Coin $JELLYJELLY had a market cap of 60 million dollars, but it dropped 50% after a sale of only 1.2 million.
5. Solana meme coins: Weak liquidity, crazy volatility
Some meme coins on Solana reach a market cap of 300 million, but their liquidity is only 5 million.
Selling or buying just 1% of the supply can raise or drop the price by 100%.
And this is why memes fly quickly - but that doesn't mean whales exit easily at the peak.
In fact, every big sale presses the price down violently.
6. How is manipulation done?
Many developers list their coins on only one or two platforms (DEX), with very limited liquidity.
8. One last tip for new traders:
If you're new to the market, beware of being deceived by numbers alone.
Don't rely only on the price of the coin.
Don't be impressed by the apparent market cap.
Don't assume that 'you're early' just because the price seems low.
Always start with analysis:
FDV: Is the project huge in disguise?
Unlock Schedule: Is there a wave of selling pressure coming?
Real liquidity: Can buying or selling move the price quickly?
Exchanges where the token is listed: Is it a DEX with few liquidity providers?
The intention of the project: Is there a real product or just a passing hype?
9. How do you protect yourself?
Use tools like:
Token Unlocks: To monitor unlock schedules
DEXTools and Birdeye: To measure real liquidity
CoinMarketCap and CoinGecko: To analyze supply and compare it with market cap
Follow reliable analysis accounts, and don't chase trends blindly.
10. The final word:
In the crypto market, money is not made from speed, but from understanding.
Financial knowledge and the ability to read the market are your real weapons.
Don't be exit liquidity for the project's whales.
Be the smart one who knows when to enter... and when to exit.