SteemitCryptoAcademy Week 13 -Cryptocurrency Market | Homework Post for @imagen |
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)
In plain English, dominance simply means being in a place of power or superiority over others. For there to be dominance, it simply means that there are two or more bodies involved. One is dominant and others being beneath. Bitcoin is said to be the largest cryptocurrency by market capitalization and has a high portion of trading volume in the cryptocurrencies markets.
Bitcoin dominance is simply the ratio between the market cap of Bitcoin to the rest of the market (Altcoins). BTC has been largely dominant until lately when new cryptocurrencies were created. This dominance is usually affected by alt-seasons which is when altcoins gain market share. In the year 2009 when BTC first came into existence, it had about 100% dominance because it was the only cryptocurrency at that moment but as at the time of performing this task, Bitcoin dominance is at 43.00% which has declined drastically over the years.
Mention at least 2 times where the market had strong falls, mention several affected currencies. (Use screenshots)
There has been a great fall in the price of cryptocurrencies in the past few months (beginning from February till about March) and I will be considering two coins here (BTC and LTC).
A.
Looking at the screenshots above, BTC was at $57,000 on the 22nd of February, 2021, and on the 1st of March, 2021…barely 8 days later, it had reduced drastically to about $45,000 which is approximately a decrease of about $12,000 (21% drop).
Also in the same February, the price of LTC was at $236 on the 20th of Feb., 2021 and within eight days, it had dropped dramatically by 30.5% to $164 on March 1st, 2021.
B.
And the Month of April 2021 was a notable season when the crypto market experienced heavy all. In this part, I will be showing the price fall for Bitcoin and Binance Coin.
Another great fall in the cryptocurrency market happened in April, 2021. Using BTC and BNB as a case study, we can see from the screenshots that on the 16th of April, 2021, BTC was at about $63,000 and made a great fall of 22.22% which made it drop to $49,000 in April 26, 2021.
BNB was also not spared as it dropped from $542 on April 16, 2021 by
11.25% to about $481 on the 19th of April, 2021.
What is the Altcoin Season?
Altcoin season is the period by which altcoins take the spotlight and have a very significant increase in price. It happens because Bitcoin actually loses some of its dominance in the cryptocurrency market to Altcoins and its market cap decreases as compared to the overall market capitalization.
The past 10weeks have been an altcoin season and you can know this because altcoins have been the talk of the town and have increased dramatically. One of the causes of altcoin season is bitcoin bullrun which means that investors sell off their BTC to make profits and they buy altcoins from the proceeds of their sales which somewhat leads to the increase in the price of the altcoins because demand is now high.
Give a brief description of at least 2 altcoins that are in the TOP 50.
Some of the Altcoins that in the category of top 50 are, Ethereum, Binance Coin, XRP, Polkadot, Dogecoin, Uniswap, etc. I will describe Ethereum (ETH) and Litecoin (LTC).
ETHEREUM
ETH is the native currency of Ethereum blockchain and is the second largest cryptocurrency by market capitalization directly after BTC. It was founded by Vitalik Buterin and Gavin Wood with its initial release in 2015. ETH is developed on the Ethereum blockchain which actually runs smart contracts.
This cryptocurrency enables smart contracts and decentralized applications to be built and used without the interference of a third party/ intermediary and its aim is to create decentralized financial products which anyone can have access to.
As at now, the price of 1 ETH is about $4117.42 and maintaining the 2nd position on market capitalization ranking with market cap of $476.89B. The price of ETH has grown so much over the weeks.
LITECOIN
LTC is a peer-to-peer cryptocurrency created in October 2011 by Charlie Lee. It is an open-source software project released under the MIT/X11 license and has a block time of 2.5minutes.
The aggregate value of LTC increased by 100% within 24hours in November 2013. It first entered the Top 5 altcoin by market capitalization in May 2017. It was a strong competitor of Bitcoin and has so many similar features with BTC although it uses a new algorithm called scrypt.
As of now, the price of 1 LTC is about $337.96 with a market cap of $22.86B.
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%)
News has a way of influencing the crypto market whether positively or negatively especially when the news is relevant. This is obviously because these trends influence trading decisions and predictions and investors can either choose to sell or buy more depending on the outcome of the news.
A perfect example is the rise in the price of Dogecoin after Elon Musk (the CEO of Tesla Motors) announced in February 2021 that he is now a DOGEfather. He kept tweeting about the coin and advise investors to add momentum to ensure it becomes the currency of the internet (in his own words). And this announcement caused a rapid rise in the price of the coin.
In the same vein, the price of DOGE coin dropped after the media recorded that Elon Musk called the currency a hustle. These made investors start selling off the coins they already had out of FOMO and hence, the price dropped.
There was also an incident that caused the drop in price of Ripple (XRP), this occurred on the 26th of April, 2021 following Ripple’s legal issues and it was announced that Ripple’s Lawsuit heats up. Immediately after that, the price began to drop.
Describe one of the following Penny cryptocurrencies:
Shiba Inu, Safeemon, or Eclipse
SAFEMOON
Safemoon definitely is an altcoin and one of the newest and fast-growing cryptocurrencies. It was launched in March 2021 by John Karony and COO Jack Haines and already has over a million users. It has a unique pattern that is likely uses it keep its investors; it charges a 10% fee for whoever sells tokens and then redistributes 5% of it to the users who HODL and this makes a lot of people refer to it as a Ponzi scheme. It has a slogan which says “safely to the moon”. It can be bought on four different cryptocurrencies exchanges as PancakeSwap, Bakery Swap, BitMart and WhiteBit
Conclusion
Cryptocurrency is comprised of Bitcoin and Altcoins (Alternative coins of BTC). We can actually say that altcoins are taking great ground and now in season and this is reducing the dominance of Bitcoin. More so, it is very visible that the news has a way of affecting the market causing either a rise or fall in price.
Hola @chiomy
Gracias por participar en la Academia Cripto de Steemit.