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Author Topic: How to decipher coinmarketcap charts?  (Read 23 times)
nsummy
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February 15, 2018, 03:39:20 PM
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I've tried wrapping my head around this but instead of just coming up with a possibly incorrect conclusion I thought I'd ask someone who just knows.

My specific question is in regards to the line for the BTC price and the USD price, take ETH for example:  https://coinmarketcap.com/currencies/ethereum/   Here and on most cryptocurrencies it seems like historically the orange BTC price line is always below the green USD line.  When this is the case, I assume that fluctuations in BTC price drive the price of the altcurrency.  No different than me saying my Google stock is now more valuable because the value of the dollar has risen.  I have no idea if this assumption is correct.  Where I get really confused is when I see the lines intersect and USD goes above BTC.  Does this mean the currency is growing at a faster rate than BTC if it intersects?  SIA is another example of this as the green surpassed the orange, and now looks like it will do it again:  https://coinmarketcap.com/currencies/siacoin/

Thanks in advance.
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February 15, 2018, 04:31:54 PM
Last edit: February 15, 2018, 04:42:10 PM by BrewMaster
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Here and on most cryptocurrencies it seems like historically the orange BTC price line is always below the green USD line.

in a chart like this, being "below" or "above" is a matter of scale that the chart uses. i can simply change the Y axis and get a different "below and above" lines.
the only thing you can compare on a chart like this is the way the change occurs. meaning price against USD goes up as price against BTC goes up and vice versa.

this is what i mean, a chart with same values but different Y scaling:


Quote
When this is the case, I assume that fluctuations in BTC price drive the price of the altcurrency.

it does but you can not make the conclusion based on previous statement.

Quote
No different than me saying my Google stock is now more valuable because the value of the dollar has risen.  I have no idea if this assumption is correct.  Where I get really confused is when I see the lines intersect and USD goes above BTC.  Does this mean the currency is growing at a faster rate than BTC if it intersects? 

you can say that, but what is really happening is that the ETH/BTC market is more active so when bitcoin price is rising in order for ETH to keep its price the same it has to drop against BTC but people usually don't care about USD value of an altcoin, they do care about its BTC value so if it goes down against bitcoin they start buying it hence creating some sort of resistance. and if it drops slower against BTC it means its USD value is rising too.

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