Steemit CryptoAcademy week 13 | homework post for @imagen The Crypto Market
Hello, good day everyone. I would like to present my homework post for @imagen. Before I start, I would like to acknowledge the professors and the crypto Academy community for such a wonderful poject to enlighten us about the crypto world.
Without wasting enough time, I would present my homework post systematically based on the questions.
1. Explain in your own words, the concept of Dominance in the world of cryptocurrencies. What is the dominance of Bitcoin at the time of performing your task? (Present at least 1 graph)
1.i. Dominance
The word dominance basically means dominating over something. Dominance could be in any form. It could be an individual dominating over and individual or an organisation. Basically, it means something or someone being superior over other thing.
In the crypto world, when we talk of dominance, we refer to how the standard of the market capitalization that a crypto has over the global market capitalization.
Bitcoin dominance refers to the domination of the Bitcoin over other Altcoins and other stable coins ( fiat). What this means is that, the total amount of Bitcoin in the market capitalization divided by the total number of all other coins including Bitcoin itself, Is higher than any other ratio between any other coin and the total market capitalization.
Assume the total Bitcoin market capitalization is 300 USD and the total market capitalization is 1000. It means Bitcoin dominance is 30%.
As we all know BTC was the first crypto to be created. The dominance at that time would certainly be 100% since no other coin was there. However as more coins are being created, the dominance would certainly reduce.
BTC dominance at the time of homework.
Looking at the chart, the BTC dominance at this time is 43.93%.
2. Mention at least 2 times where the market had strong falls, mention several affected currencies. (Use screenshots)
Due to the high volatility in the crypto world, the price market isn't stable. The the market capitalization could either rise or fall.
looking at the BTC chart 1
Looking from 12th April to 24th April, due to the drastic fall on the market, BTC fall drastically. From 63K to 49k. A difference of 14k. During such times, any any who bought the btc at anything around 55k would start to panic.
Looking at the 2nd chart, steem also reduced from 1.25 to 0.76. A verydrastic change to the steem coin. A difference of 0.46. Which is a huge difference.
looking at the 2nd chart
The market capitalization decreased from 22nd February to 2nd march.
Bitcoin drop from 57k to 49k which is also a big loss. A difference of 8k.
From the Litecoin chart, we notice another huge loss.
A fall from $227 to $175. A difference of $52.
3. What is Altcoin Season?
Basically when we talk about Altcoins, they are the other crypto currencies aside Bitcoin (BTC). In the crypto market, when the dominance of Bitcoin is dropping and Bitcoin itself is moving up, we call it Altcoin season because that the time Altcoins starts to move. But however, when both Bitcoin price and its dominance are both moving up, is not advisable to hold Altcoins. But rather hold BTC.
Altcoin prices rise as Bitcoin dominance drops. This is basically the Altcoins season. since the market capitalization of Bitcoin drops, the others would increase in dominance and increase in price as well.
4. Give a brief description of at least 2 altcoins that are in the TOP 50.
Altcoins involved in the top 50 includes,
Litecoin and dogecoin
Litecoin
The current position of the litecoin is 11th.
Litecoin is a peer to peer currency. In 2011, a computer scientist who graduated from MIT, popularly known as Charlie Lee created the Litecoin after the bitcoin had already been created. The number of litecoin in stock is relatively larger compared to the amount of circulation for bitcoin. Litecoin has 63 million coins circulation more than bitcoin
source
This is the current price of the litecoin.
One litecoin is currently $372 which has increased by 6.06% within 24hrs from now.
Dogecoin
the current position of the Dogecoin is 4th
The dogecoin was created in 2013. Basically the dogecoin was created to reduce transactions fees. The dogecoin was created by two software engineers, namely Billy Markus and Jackson Palmer. The dogecoin is one of the most reliable and revevant coins in the top 50. About 120 billion dogecoin is currently in circulation.
The current price of one dogecoin is 0.4962. A slight increase within the 24hrs of 0.46%.
5. How can relevant news influence the price of cryptocurrencies in a positive or negative way? Name at least 3 examples. (Use screenshots) (Example: SENSO announced a 70% token burn, in a week the price increased more than 100%)
1
On 24th march, elon musk tweeted.
Few days after the tweet, bitcoin had a significant market rise. Elon musk promoted Bitcoin when he said it could be used to purchase tesla.
Looking at the above chart, you would notice that elon musk had great influence on BTC.
2
In 28th April 2021, elon musk tweeted about dogecoin.
Before the post, dogecoin was very small and probably negligible in small amounts.
After the tweet, there is no doubt about how dogecoin have moved significantly.
before Elon musk tweet
After Elon musk tweeted
3
Due to the constant influence by the media Ripple had a gradual decline. From a higher point to relatively lower point.
6.Describe one of the following Penny cryptocurrencies:Shiba Inu, Safeemon, or Eclipse
SHIBA INU
Vitalik Buterin created the shiba inu coin (SHIB token)which is named after a breed of dog. The SHIB token is nicknamed dogecoin killer because of its relationship with the dogecoin.
The SHIB is an ERC-20 token built on the Ethereum blockchain platform. Because of it small value, users can hold over trillions and billions of the SHIB tokens.
The SHIB has a very volatile characteristics to rising and falling. Although most of the coins has a volatile characteristics, the SHIB inu is more volatile due to its small price.
Conclusion
Looking at the Bitcoin dominance, it plays a very important role in holding Altcoins, Bitcoin and Fiat. Users are advised to hold Bitcoin when both the price and Its dominance are moving simultaneously. Whereas users are advised to go for Altcoins when Bitcoin price moves but its dominance falls.
Hola @avagah
Gracias por participar en la Academia Cripto de Steemit.