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Cryptocurrency Chart – 5 Graphs of the Past, Present and Future of Crypto Senior Research Analyst Madeline Hume asks what it is really like to hold Cryptocurrency in 2022

Over the past seven years, cryptocurrencies have grown from about $5.2 billion in market capitalization for the top 100 coins to nearly $1.7 trillion in January 2022.

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Cryptocurrency Chart

Cryptocurrencies now represent the fourth most popular type of investment among investors, behind only stocks, mutual funds and bonds. Bitcoin alone has a market capitalization that would be among the 10 largest companies in the S&P 500.

Chart Patterns To Build A Crypto Trading Toolkit

There are a couple of important things to understand about the cryptocurrency universe up front: the different types of cryptocurrencies and how they are powered by different blockchains.

Although Bitcoin is the most popular cryptocurrency, there are many others available. The second largest cryptocurrency is ether, whose main difference from bitcoin is its purpose: where the construction of bitcoin is quite simple and is intended to act as an alternative currency, ether contains also the code to activate sales and purchases when certain criteria are met (known as “smart contracts”). And there are “altcoins”, a category that includes all other cryptocurrencies, such as Ripple and Litecoin.

These cryptocurrencies are powered by the underlying technology of blockchains, which record every transaction and cannot be changed. The persistence of this mechanism is, for example, how non-fungible tokens, or NFTs, obtain their certificates of authenticity. Different blockchains support different types of cryptocurrencies: Bitcoin, for example, lives on the Bitcoin blockchain; Ether resides on the Ethereum blockchain.

As the cryptocurrency market has captured the attention of the rest of the investment world and shaken off some of the early skepticism surrounding its viability, we decided to take a deeper look at the forces driving it. its improbable growth. The effort culminated in the publication of the 2022 Cryptocurrency Landscape, the first of its kind.

Crypto Trading 101: Simple Charting Patterns Explained

We were not surprised to find that bitcoin accounted for most of the growth in the cryptocurrency market in its early history, but it was surprising to see that bitcoin quickly lost market share to other cryptocurrencies in recent years.

As shown in the chart below, from January 2017 to January 2022, a market capitalization weighted index of the 100 second largest cryptocurrencies outperformed Bitcoin by more than 75 percentage points annually.[2] Although it has returned 103% on average every year, Bitcoin’s share of the cryptocurrency market has fallen from almost 90% in December 2016 to less than 43% in January 2022, as ether and altcoins they expanded.

Ether accounts for the first part of the skewed growth. And while altcoins are often overlooked, their market share has grown significantly over the past five years.

Ether experienced sharp peaks and valleys in price as enthusiasts speculated on a variety of applications for the Ethereum blockchain. As of January 2021, however, Ether still fluctuated between 15% and 20% of the market, while Bitcoin’s market share continued to drop steadily from 70% to close to 40%, even if it returned a cumulative return of 32%.

Chart: 2021: Year Of The Cryptocurrency

This is because so many users have flocked to Ethereum that it has become expensive to trade on the network.

Enter the unloved cryptocurrency: altcoins. Including all other cryptocurrencies other than Bitcoin and Ether, altcoins, such as Solana, have developed blockchains that undercut the transaction costs of Ethereum while offering comparable applications (especially decentralized financial services) and have taken over the share market from Ether as a result.

Altcoins, on the other hand, are generally more specialized than Bitcoin, a cryptocurrency with few derivative projects (that is, products whose value depends on an underlying asset), or Ether, a cryptocurrency that the blockchain offers as much flexibility as programmers. can use That for almost all derivative projects.

For example, altcoin Terra exists on a blockchain that only creates stablecoin tokens, a class of cryptocurrency backed by assets like the US Treasury. U. Dollar or gold. Altcoin Polkadot, on the other hand, transports information or assets between other blockchains.

How To Read Crypto Charts?

Specialization has piqued investor interest in the past, but as the cryptocurrency market matures, we expect diversity among altcoins to become a key strength of the asset class, breaking historically tight correlations which we observed between bitcoin and other digital assets.

From Ether’s historic 9,500% rise in 2017 to Solana’s 11,100% tear in 2021, much of the interest in cryptocurrency has been a self-fulfilling prophecy. Investors see fantastic profits and enter the market, resulting in more upward pressure on prices. But every breathtaking rally is guaranteed to have an equally spectacular crash at the other end, and cryptocurrencies lack a fundamental anchor like the face value of a bond or the discounted cash flows of a stock. Ether lost almost 90% of its value between December 2017 and December 2018, while Solana lost more than half of its value between November 2021 and January 2022.

From January 2015, when regular price data begins, to January 2022, the MVIS CryptoCompare Digital Asset 100 index posted a standard deviation more than double that of the second most volatile index we identified and more than five times more volatile than the MSCI ACWI index. .

Surprisingly, this action includes stablecoins, which often link to a hard hook. This means that non-pegged cryptocurrencies in general are likely to fluctuate even more than the number suggests.

How To Make Money Analyzing Crypto Charts

Even apart from its volatility, the cryptocurrency market does not behave like any other investment, which has sparked the interest of institutional investors looking to increase their exposure to uncorrelated returns.

Throughout its history, the price curves of the crypto market have more in common with the shares of the developed international market, but with a correlation of only 0.28, there is still a lot of daylight between the pair compared to other asset classes.

That said, correlations between cryptocurrencies and risky assets have emerged in recent years, especially after the 2020 stock market crash.

However, it is important to examine these figures in context. Cryptocurrencies are far from being the only ones experiencing closer correlations to the global market capitalization. In fact, the sensitivity of several key sub-sections of the bond market rose in lockstep with cryptocurrency in the same period.

Bitcoin ($btc Usd) Cryptocurrency Price Chart Flashes A Warning Signal

This is not surprising. Correlations for all asset classes tend to increase during periods of market stress when liquidity is compressed, and these relationships generally ease once the winds subside. Higher correlations tend to persist until the measurement window captures the stress event and then dissipate. In relative terms, cryptocurrencies have almost no correlation with stocks.

However, while the increase in correlations may feel like a swipe to an investor accustomed to the ups and downs of financial markets, it suggests that unpegged cryptocurrencies are a poor substitute for fiat money.

Unlike financial securities, safe havens like cash tend not to act like the rest of the market when it falls. Quite the opposite: fiat currencies are designed to hold up better under market stress, due to consumer confidence gained over centuries of providing liquidity when economies become overdrawn.

Which brings us to another asset that the market has compared to Bitcoin: gold. Hailed as “digital gold,” bitcoin’s fixed supply and decentralized nature have drawn attention from those who believe it could serve as a viable competitor to the bars stocked in bomb shelters by planners of the doomsday.

How To Read Crypto Charts For Profitable Trading?

This argument has intellectual merit, but in the short term, analysts agree that Bitcoin is unlikely to dim the luster of gold. People have been using the metal to do business since at least 600 BC, while Bitcoin has only been around for 14 years.[3]

The alternative use case of gold buffers the metal during periods of market stress so that it does not depend solely on market sentiment to create liquidity. We believe that relative to gold, bitcoin lacks enough external applications to offset the impact of market events on its price, limiting its usefulness as a store of value.

Additionally, the first transaction denominated in Bitcoin didn’t happen until 2010, meaning we only have 11 years of price data to study. During the market correction in our time horizon, the correlation of gold to stocks remained low, while bitcoins followed the cryptocurrency market in an upward drift.

With $1.7 trillion in total market capitalization, crypto can no longer hide in the shadows of Reddit forums. The incredible growth of the asset class requires as much caution as excitement.

How To Read Crypto Charts Like A Pro

While cryptocurrencies have created entire parallel economies from scratch in just 14 short years (no big deal) today, the decentralized infrastructure of cryptocurrencies still poses significant obstacles to real-world use cases.

As a result, cryptocurrency is still a new, highly concentrated and highly volatile brand of investable security. Rather than rapid adoption, we expect that integration with existing systems in financial services and other sectors will likely determine future adoption rates in this area. If this path develops, the opportunities for investors increase at a rate matched only by the potential risks.

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  1. Cryptocurrency ChartCryptocurrencies now represent the fourth most popular type of investment among investors, behind only stocks, mutual funds and bonds. Bitcoin alone has a market capitalization that would be among the 10 largest companies in the S&P 500.Chart Patterns To Build A Crypto Trading ToolkitThere are a couple of important things to understand about the cryptocurrency universe up front: the different types of cryptocurrencies and how they are powered by different blockchains.Although Bitcoin is the most popular cryptocurrency, there are many others available. The second largest cryptocurrency is ether, whose main difference from bitcoin is its purpose: where the construction of bitcoin is quite simple and is intended to act as an alternative currency, ether contains also the code to activate sales and purchases when certain criteria are met (known as "smart contracts"). And there are "altcoins", a category that includes all other cryptocurrencies, such as Ripple and Litecoin.These cryptocurrencies are powered by the underlying technology of blockchains, which record every transaction and cannot be changed. The persistence of this mechanism is, for example, how non-fungible tokens, or NFTs, obtain their certificates of authenticity. Different blockchains support different types of cryptocurrencies: Bitcoin, for example, lives on the Bitcoin blockchain; Ether resides on the Ethereum blockchain.As the cryptocurrency market has captured the attention of the rest of the investment world and shaken off some of the early skepticism surrounding its viability, we decided to take a deeper look at the forces driving it. its improbable growth. The effort culminated in the publication of the 2022 Cryptocurrency Landscape, the first of its kind.Crypto Trading 101: Simple Charting Patterns ExplainedWe were not surprised to find that bitcoin accounted for most of the growth in the cryptocurrency market in its early history, but it was surprising to see that bitcoin quickly lost market share to other cryptocurrencies in recent years.As shown in the chart below, from January 2017 to January 2022, a market capitalization weighted index of the 100 second largest cryptocurrencies outperformed Bitcoin by more than 75 percentage points annually.[2] Although it has returned 103% on average every year, Bitcoin's share of the cryptocurrency market has fallen from almost 90% in December 2016 to less than 43% in January 2022, as ether and altcoins they expanded.Ether accounts for the first part of the skewed growth. And while altcoins are often overlooked, their market share has grown significantly over the past five years.Ether experienced sharp peaks and valleys in price as enthusiasts speculated on a variety of applications for the Ethereum blockchain. As of January 2021, however, Ether still fluctuated between 15% and 20% of the market, while Bitcoin's market share continued to drop steadily from 70% to close to 40%, even if it returned a cumulative return of 32%.Chart: 2021: Year Of The CryptocurrencyThis is because so many users have flocked to Ethereum that it has become expensive to trade on the network.Enter the unloved cryptocurrency: altcoins. Including all other cryptocurrencies other than Bitcoin and Ether, altcoins, such as Solana, have developed blockchains that undercut the transaction costs of Ethereum while offering comparable applications (especially decentralized financial services) and have taken over the share market from Ether as a result.Altcoins, on the other hand, are generally more specialized than Bitcoin, a cryptocurrency with few derivative projects (that is, products whose value depends on an underlying asset), or Ether, a cryptocurrency that the blockchain offers as much flexibility as programmers. can use That for almost all derivative projects.For example, altcoin Terra exists on a blockchain that only creates stablecoin tokens, a class of cryptocurrency backed by assets like the US Treasury. U. Dollar or gold. Altcoin Polkadot, on the other hand, transports information or assets between other blockchains.How To Read Crypto Charts?Specialization has piqued investor interest in the past, but as the cryptocurrency market matures, we expect diversity among altcoins to become a key strength of the asset class, breaking historically tight correlations which we observed between bitcoin and other digital assets.From Ether's historic 9,500% rise in 2017 to Solana's 11,100% tear in 2021, much of the interest in cryptocurrency has been a self-fulfilling prophecy. Investors see fantastic profits and enter the market, resulting in more upward pressure on prices. But every breathtaking rally is guaranteed to have an equally spectacular crash at the other end, and cryptocurrencies lack a fundamental anchor like the face value of a bond or the discounted cash flows of a stock. Ether lost almost 90% of its value between December 2017 and December 2018, while Solana lost more than half of its value between November 2021 and January 2022.From January 2015, when regular price data begins, to January 2022, the MVIS CryptoCompare Digital Asset 100 index posted a standard deviation more than double that of the second most volatile index we identified and more than five times more volatile than the MSCI ACWI index. .Surprisingly, this action includes stablecoins, which often link to a hard hook. This means that non-pegged cryptocurrencies in general are likely to fluctuate even more than the number suggests.How To Make Money Analyzing Crypto ChartsEven apart from its volatility, the cryptocurrency market does not behave like any other investment, which has sparked the interest of institutional investors looking to increase their exposure to uncorrelated returns.Throughout its history, the price curves of the crypto market have more in common with the shares of the developed international market, but with a correlation of only 0.28, there is still a lot of daylight between the pair compared to other asset classes.That said, correlations between cryptocurrencies and risky assets have emerged in recent years, especially after the 2020 stock market crash.However, it is important to examine these figures in context. Cryptocurrencies are far from being the only ones experiencing closer correlations to the global market capitalization. In fact, the sensitivity of several key sub-sections of the bond market rose in lockstep with cryptocurrency in the same period.Bitcoin ($btc Usd) Cryptocurrency Price Chart Flashes A Warning SignalThis is not surprising. Correlations for all asset classes tend to increase during periods of market stress when liquidity is compressed, and these relationships generally ease once the winds subside. Higher correlations tend to persist until the measurement window captures the stress event and then dissipate. In relative terms, cryptocurrencies have almost no correlation with stocks.However, while the increase in correlations may feel like a swipe to an investor accustomed to the ups and downs of financial markets, it suggests that unpegged cryptocurrencies are a poor substitute for fiat money.Unlike financial securities, safe havens like cash tend not to act like the rest of the market when it falls. Quite the opposite: fiat currencies are designed to hold up better under market stress, due to consumer confidence gained over centuries of providing liquidity when economies become overdrawn.Which brings us to another asset that the market has compared to Bitcoin: gold. Hailed as "digital gold," bitcoin's fixed supply and decentralized nature have drawn attention from those who believe it could serve as a viable competitor to the bars stocked in bomb shelters by planners of the doomsday.How To Read Crypto Charts For Profitable Trading?This argument has intellectual merit, but in the short term, analysts agree that Bitcoin is unlikely to dim the luster of gold. People have been using the metal to do business since at least 600 BC, while Bitcoin has only been around for 14 years.[3]The alternative use case of gold buffers the metal during periods of market stress so that it does not depend solely on market sentiment to create liquidity. We believe that relative to gold, bitcoin lacks enough external applications to offset the impact of market events on its price, limiting its usefulness as a store of value.Additionally, the first transaction denominated in Bitcoin didn't happen until 2010, meaning we only have 11 years of price data to study. During the market correction in our time horizon, the correlation of gold to stocks remained low, while bitcoins followed the cryptocurrency market in an upward drift.With $1.7 trillion in total market capitalization, crypto can no longer hide in the shadows of Reddit forums. The incredible growth of the asset class requires as much caution as excitement.How To Read Crypto Charts Like A Pro