This comment in the picture caught my attention, and it may be clearly wrong for most people, but there are people who may miss such information, so it must be noted.
My brothers, you must know how the price of a currency is determined. The idea is not that the price of a certain currency is high if it is good and that the price of that currency is low if it is bad or that it can reach the price of a certain currency. The subject is completely different. Let us see how with examples:
$XRP Its price today is around $2.3, while for example
$TRB Its price today is around $90.
Although XRP ranks third in digital currencies, its price is lower!! Why?
Because the currency price is determined based on a simple equation, which is:
Piece price = Market value ÷ Number of coins
The number of XRP coins currently in circulation is approximately 57 billion, and its market value is approximately $140 billion. The result of dividing the two numbers according to the equation is the current currency price. Try viewing the trb information, for example, and apply this to yourself.
What benefit would it give you to know this basic information that you should not enter into a single deal without knowing?
It will make you set logical goals for the currency and not get carried away by buying zero-value currencies thinking that they will reach a dollar one day! To make sure whether this is possible or not, take simple steps that you will do mentally later. Just divide a logical market value that such a currency might reach by its numbers available for trading and you will see whether this is possible or impossible.
How will I determine a hypothetical market value for a certain currency and make this value logical.. In other words, how do I know that this market value suits this currency? Because according to what you said, if we assume that TRB will reach the same market value as XRB, the price of TRB will be more than $51,000!!! Is this logical??
Definitely not.
The market value is assumed based on several factors:
First, the size of the entire market, which is approximately 3.5 trillion.
Secondly, Bitcoin’s dominance is approximately 57% of the total market size.
Third, compare the currency you choose based on its famous counterparts in the same field, i.e. compare game currencies with each other and artificial intelligence currencies with each other, and so on. Always compare with the number 1 currency in the same field and assume that your currency, for example, will reach less or more than its market value based on the size of the project, its strength, the interest of its team, and whether it is actually possible to collect this market value or not. Dividing this value by the number of currencies available for trading will give you the goal that this currency can reach.
Certain points must be taken into consideration:
1. Bitcoin and Ethereum alone account for about 70% of the total 3.5 trillion, meaning there is about one trillion for all the world's currencies and 2.5 trillion within these two currencies alone (that's why we care about the low ownership).
2. You should pay attention to the quantities and release dates of currencies that have not yet been put into circulation, because it is possible, for example, that a currency maintains the same market value and no one makes a single sale, but you see that its price is decreasing! How??
This is done by increasing the number of currencies, i.e. changing one of the corners of the equation, which is its denominator. We all know that the larger the denominator, the smaller the result. The more currencies, the lower the price. This is known as “inflation.”
3. Try not to exaggerate the market value and assume reasonable numbers, and learn the basics of technical analysis such as knowing support and resistance and drawing Fibonacci, because they will help you and will be an additional tool to reinforce and confirm your analysis. If you assume a certain market value and do the equation and then draw Fibonacci or determine the supports and resistances and find them close to your assumption, this means that you are in the right direction, and the opposite is also true if you set a target based on Fibonacci, for example, or as support and resistance and apply that to the equation and find a very large market value, this simply means that the currency has inflated and that large numbers have increased in past seasons and that although the currency has previously reached this price, it is impossible for it to reach it this time because they increased the currencies and the currency has inflated.
I tried as much as possible to collect the most useful information in the simplest way possible according to my capabilities, and I hope that someone will benefit from this.
Good luck everyone 🌹
