How to Invest in Cryptos like a pro: 1. Reading Charts

Quick Tips to become a good investor with no cost, no pain and in no time:

1. Read Charts correctly.

Here we are not talking about Technical Analysis in detail. You do not have to know about technical analysis to apply the following technics, just a little of common sense.

1.1 Reading Graphs from Coinmarketcap.com

This is a must read webpage for Cryptos investors: https://coinmarketcap.com.

CoinMarketCap website offers charts fro the most common cryptos.

1.1.1 Difference between Market Cap Price in USD and Price in BTC

This is an interesting graph to start with. Notice that The Market Cap (in blue) is higher than the price in US. Normally we expect them to follow very close and similar pattern, but here is not the case. This happened when suddenly, somewhere in 11/2017 the supply of NEO increased, but the price, stayed stable. This is not easy to see, as one might expect that more currency in the market would result in a decrease in price(token dilution).

To see another example, look at the Market Cap of ZCash. It is interesting because we see that the Increasing Market Cap makes the price looks stagnated. Zcash has a Market Cap close to 600 Million US dollars; since new tokens come in existance next five years, there will be a drasticallly increase in supply each year, affecting the market cap[1].

First conclusion: Market Caps can be deceiving and can affect investment strategies.

1.1.2 Do not read charts alone

This is a very interesting fact: we live in a connected society, and in the context of cryptos even more. Big investors can affect the market behaviour by investing in different cryptos or not investing at all. I have notice that in Bullish times of Bitcoin, the price of other currencies decrease notoriously. Casually

In these graphs you can see that small market caps then to have similar patterns in this screenshot from coinmarketcap the 02 of Nov. 2017.

The following chart is interesting because it shows three different coins: Bitcoin in Yellow, Dash in Green and IOTA in red. It is very interesting to me to see how these two patterns (IOTA and Dash) look very alike in contrst with Bitcoin.
Bitcoin climbs while these other currencies go down in a parallel shape. Correlation is very high between these 3 cryptos, interesting being these 3 very different projects[2].

References:

[1]. For more details, please read Inflation Factor in Cryptocurrency, in the following link or anywhere else:
https://blog.sia.tech/want-to-deflate-the-token-bubble-fix-the-market-cap-indicator-d50f7f1e1ec4

[2] The graph was done in tradingview.com. Make your own graphs by clicking hereunder:
https://www.tradingview.com