Market Cap and Trading volume

[Yogee]

Anyone who has experienced trading cryptocurrencies know for sure that some coins and tokens with low cap are easily manipulated. They can be pumped X2 or dumped -90+% with just a few thousand dollars. This is why some people rely on fundamental analysis rather than reading the charts when searching for what they call "gems".

So I would like to address these question to active and serious traders:

1. What is your ideal or accepted market capitalization and trading volume for a token or coin before you do technical analysis?

2. The 50^th ranked is currently above $300 million. Do you consider that as a minimum? It can be lower or must it be higher?

Let us know.



P.S.

I'm trying to learn from real or actual traders. As much as possible, I'm looking for direct answers and not sentiments like "trading altcoin is a losing trade" or "only trade bitcoin" and other opinions similar to those. Like it or not, there are people making money at this time from trading cryptocurrencies other than bitcoin.
 

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[adaseb]

The market caps on CMC don't always mean much. One reason is because there could be a small cap coin listed on some unknown exchange with a large market cap while another coin listed on a reputable exchange like Binance can show a much lower market cap. In this scenario market cap doesn't mean anything.

Sure the lower cap coin seems like it might rally much easier however there are more players on Binance than say a smaller unknown exchange. Hence you always need to do your due diligence.

[Yogee]

The market caps on CMC don't always mean much. One reason is because there could be a small cap coin listed on some unknown exchange with a large market cap while another coin listed on a reputable exchange like Binance can show a much lower market cap. In this scenario market cap doesn't mean anything.

Sure the lower cap coin seems like it might rally much easier however there are more players on Binance than say a smaller unknown exchange. Hence you always need to do your due diligence.

It doesn't have to be CMC or Coingecko. I don't want this to turn into criticisms of market data aggregators or any exchange. I appreciate your response but, like I said, I'm looking for direct answers to my questions. You failed address any of them. If you don't actually chart, you don't have to answer.

[NavI_027]

I'm not yet a trader but soon to be. I'm just like you, studying this field so let me share my insight .

1. What is your ideal or accepted market capitalization and trading volume for a token or coin before you do technical analysis?

I'm only planning to work around coins with 1B market cap and above (highest which is bitcoin would be most preferrable) because I think I'll be more comfortable with them. Coins with large market cap are usually major players thus expected to be reputable and considered strong through the years.

When it comes to the 50th coin you are pertaining about, ICON (am I right?), I might say that it is not a bad choice. I considered it a safe place for investment.

[GreatArkansas]

Most of the altcoins that are being like this are found in some low volume exchanges or not so popular.
That is also some people include doubt about the exchange itself is also part of the pumps and dumps schemes of some altcoins especially those low market cap altcoins.
In terms of doing some technical analysis, my advice is you can do it to the top 50-100 market cap rankings. And also to those exchanges that got huge trading volume.

[nelson4lov]

Since there's different ranges of altcoins, I'm a fan of trading big caps to mid cap tokens. Tokens in these ranges usually have very little manipulations and don't have absurd increase in prices that is usually followed by a classical dump. Before trading any asset, I have to make sure that:

1. The project has a community: truth be told, only projects with an active community is winning the crypto game. Bitcoin is still king thanks to its large, ever-growing community. So this is something I tend to lookout for and it's something smaller cap tokens (or shitcoins as most people call them) don't have.

2. Marketcap & Volume: These are 2 key information about any cryptocurrency that I don't play with. Majority of tokens I've seen that have been pumped / dumped / manipulated have small market cap and tiny volumes which makes it easier to carry out such activity. I know that assets do get pumped and drops at some point but there's difference a healthy price movement with retracement than a pump and dump. So I look out for tokens with reasonable marketcap and volume before deciding to trade it.

[Danslip]

So I would like to address these question to active and serious traders:

1. What is your ideal or accepted market capitalization and trading volume for a token or coin before you do technical analysis?

Let us know.

 

The lower marketcap altcoins less than $100mln is the ideal for buy and forget strategy. Just in simple example, I will explain why buying the low marketcap altcoins and waiting is more profitable than trading BTC or the same altcoins. For making things easy, I will share this part of an email from exchange:
If you had you bought and held bitcoin at $1,000 USD on May 15, 2020, by August 18, the value of your bitcoin would be $1,223.38 USD. However, if you had traded top/bottoms for 14 days, the value would be $1,084.30 USD, taking fees into account.

The same story is true for trading altcoins, for pure marketcap or however you call it trader should has experience to exclude the wash trading volume, fake bot trading data from the Coingecko/CMC. After having an idea and trusting the real volume numbers, buying the desired altcoin will be more suitable. Ideally, I look for altcoins with less than $200mln marketcap and the listed exchange is an important part here too.

[gentlemand]

I wouldn't pay much attention to market cap at all. Volume is much, much more relevant and important, but it would have to be volume on exchanges with some credibility. If the volume isn't there then everything else is meaningless fiction.

Most of the obscure shitcoin action takes place on exchanges that can't be trusted to tell you the truth. I've looked at order books that were 50 dollars deep with millions of dollars in trades happening like magic just above those 1 cent 'walls'.

If there isn't volume you can't realise any profit. I've seen people say 'holy shit, look at that Xcoin pump. Whoever got in early must be rich.' Then you look at the volume of that $100 million market cap coin and you would completely squash the market flat trying to complete one $500 sell.

[Yogee]

I wouldn't pay much attention to market cap at all....

I understand that even market cap can be manipulated by either faking out the price or by inflating the circulating supply but, to me, it still has a role when deciding which coin or token to look at and possibly trade actively. I also look at how long they've been at the top 20 or top 50. It's a good indicator for me if they're able to sustain their ranking for a long time.

Since there's different ranges of altcoins, I'm a fan of trading big caps to mid cap tokens. Tokens in these ranges usually have very little manipulations and don't have absurd increase in prices that is usually followed by a classical dump. Before trading any asset, I have to make sure that:

1. The project has a community: truth be told, only projects with an active community is winning the crypto game. Bitcoin is still king thanks to its large, ever-growing community. So this is something I tend to lookout for and it's something smaller cap tokens (or shitcoins as most people call them) don't have.

2. Marketcap & Volume: These are 2 key information about any cryptocurrency that I don't play with. Majority of tokens I've seen that have been pumped / dumped / manipulated have small market cap and tiny volumes which makes it easier to carry out such activity. I know that assets do get pumped and drops at some point but there's difference a healthy price movement with retracement than a pump and dump. So I look out for tokens with reasonable marketcap and volume before deciding to trade it.

Can you share what you consider as big caps and mid caps in $numbers just to be clear since we may have a different view on that.

1. Community like what ChainLink has? The Link marines that pumped then dumped the token recently. Setting aside sarcasm or joke, I get what you mean.
2. So again, what is reasonable market cap for you? State in $numbers please.

....In terms of doing some technical analysis, my advice is you can do it to the top 50-100 market cap rankings. And also to those exchanges that got huge trading volume.

At what amount is considered as huge trading volume?

.....I'm only planning to work around coins with 1B market cap and above (highest which is bitcoin would be most preferrable) because I think I'll be more comfortable with them. Coins with large market cap are usually major players thus expected to be reputable and considered strong through the years.

When it comes to the 50th coin you are pertaining about, ICON (am I right?), I might say that it is not a bad choice. I considered it a safe place for investment.

$1 Billion market cap is top 25 from Coingecko's current data.
I intentionally did not put the name of the 50^th since it can go below that rank at any given time.

[dimonstration]

You apply technical analysis to all coin regardless of marketcap and volume as long as the coin has a previous trading data. You need some fundamental analysis to add on your Technical analysis if you want to trade small caps coin for more accurate result. Technical analysis is the prediction of next movement base on the past record no matter what is the marketcap size of a coin. The only crucial on this small caps trading when used TA is choosing the perfect time frame that will show an accurate flow of the trend that's many newbie traders are whining when there TA didn't work while they are not using the right Timeframe.

[Yogee]

You apply technical analysis to all coin regardless of marketcap and volume as long as the coin has a previous trading data. You need some fundamental analysis to add on your Technical analysis if you want to trade small caps coin for more accurate result. Technical analysis is the prediction of next movement base on the past record no matter what is the marketcap size of a coin. The only crucial on this small caps trading when used TA is choosing the perfect time frame that will show an accurate flow of the trend that's many newbie traders are whining when there TA didn't work while they are not using the right Timeframe.

Disregarding market cap AND trading volume is kinda suicidal even if you apply fundamental analysis. It's stupid to be frank.

I have doubt that you actually trade based on your post.

Have you actually done a technical analysis on coins or tokens that has less than $10,000 trading volume with less than 1 million market cap and actively traded them? If yes, how did that turn out for you?

[mk4]

Mid to long term trader here. I only trade using fundamental information and do zero technical analysis.

As for market capitalization and trading volume, I literally don't take these into account as what I mostly trade around is market sentiment; pretty much trading around the "buy the rumour, sell the news" thingy.

^Probably not the answer you're looking for, but yea.

[Yogee]

Mid to long term trader here. I only trade using fundamental information and do zero technical analysis.

As for market capitalization and trading volume, I literally don't take these into account as what I mostly trade around is market sentiment; pretty much trading around the "buy the rumour, sell the news" thingy.

^Probably not the answer you're looking for, but yea.

Yea, not really what I'm looking for but goodluck with your strategy.

........

I was hoping I could get answers from members who actually spend time reading charts and actively trades on a daily, weekly, or even monthly basis. The information is probably too personal and part of their secret "ingredients" in trading. I'll probably lock this thread soon if nobody wants to spill the beans 

[mk4]

I was hoping I could get answers from members who actually spend time reading charts and actively trades on a daily, weekly, or even monthly basis. The information is probably too personal and part of their secret "ingredients" in trading. I'll probably lock this thread soon if nobody wants to spill the beans  

Yeap, that's the unfortunate truth. Giving out small tips can potentially lead to leaking out the strategy. And the last thing you want as a trader is to give out your strategy, and potentially effectively kill the strategy. This is one of those things that you need to learn on your own through trial and error.

Best of luck though.

[TradingBull.io]

Besides Market Cap, the market depth is something that would require attention: Accumulated buy/sell orders not yet executed (pending)
In theory, it is a measure of long term liquidity and interest.

However, it is difficult to find (aggregators like CMC do not provide it), probably because it can be easily manipulated by exchanges, just like trading volumes (wash trading).

Day trading low caps is often something led by crypto influencers on Twitter and telegram signal channels.
It is indeed easily manipulated by pump/dump "signals".

Top25 is more reliable as pump/dump schemes are costlier.
Whales can still dump large volumes but usually prefer to trade OTC to get a fix rate for their whole bag and avoid slippage.


TradingBull.io

[cryptomaniac_xxx]

Mid to long term trader here. I only trade using fundamental information and do zero technical analysis.

As for market capitalization and trading volume, I literally don't take these into account as what I mostly trade around is market sentiment; pretty much trading around the "buy the rumour, sell the news" thingy.

^Probably not the answer you're looking for, but yea.

Yea, not really what I'm looking for but goodluck with your strategy.

........

I was hoping I could get answers from members who actually spend time reading charts and actively trades on a daily, weekly, or even monthly basis. The information is probably too personal and part of their secret "ingredients" in trading. I'll probably lock this thread soon if nobody wants to spill the beans 

There is one thread by @tokeweed, Small Cap Alts Speculation. But as the title suggest, it's just speculation and I haven't seen any technical details as well.

So yes, probably no one is willing to tell the 'secret sauce', maybe they don't want to sort of saturate the market with their formula between market capitalization and trading volume strategy. Or prolly combinations of a lot of parameters that there are no basic set of rules to follow.

[cosmofly]

2. The 50^th ranked is currently above $300 million. Do you consider that as a minimum? It can be lower or must it be higher?
 

$ 300 million is a fairly small volume for the current situation. Recently, the average day in Binance is over 700 million dollars. The $ 300 million shows that the traders are hesitant, if that goes on there will be a big pump or dump coming. That was my first volume trading lesson as well as my first market cap. We also have to analyze BTC dominance to see where the altcoins season is. There is a lot to analyze and, most importantly, our vision.

[joniboini]

^
How can you say it's small when it is nearly half of the average volume you mentioned on the same sentence? Unless you're talking about marketcap then I don't think $300 M a day is a bad volume, it's probably more than enough to swing trade every day.

As for me, I'd look at the top 20-50 on the marketcap ranking and then see which one has the biggest weekly volume, then I'd start from there. Or, just use top exchanges and trade the top 5 or 10 coins based on trading volume. It will be easier but the volatility might be lower (which means lower profits).

[Yogee]

2. The 50^th ranked is currently above $300 million. Do you consider that as a minimum? It can be lower or must it be higher?
 

$ 300 million is a fairly small volume for the current situation. Recently, the average day in Binance is over 700 million dollars. The $ 300 million shows that the traders are hesitant, if that goes on there will be a big pump or dump coming. That was my first volume trading lesson as well as my first market cap.

I just want to clarify that the I was talking about the market cap when I said above $300 million. I apologize if that caused some confusion.

Anyhow, I agree with joniboini that it's not a small daily trading volume.

Is the $700 million average for each coin listed on Binance or the total volume for the exchange?
I checked BNB on CMC and here's the current 24H data for Binance:
- BNB/USDT $47,663,031
- BNB/BTC $21,062,646

We also have to analyze BTC dominance to see where the altcoins season is.

That is why I said in my post that "there are people making money at this time from trading cryptocurrencies other than bitcoin"

There is a lot to analyze and, most importantly, our vision.

Vision?