Definition:
Market capitalization, also commonly referred to as market cap, is a measure of the total dollar value worth of a cryptocurrency or blockchain project. It is calculated by multiplying the number of coins currently in circulation by the latest unit price of the coin or token.
Market cap = Circulating supply x Price per coin/token
Explanation:
The market cap of a cryptocurrency is typically used as a metric to rank and evaluate the size and value of a cryptocurrency asset. In fact, most cryptocurrency price-tracking websites rank cryptocurrencies in accordance with their market cap by default.
Technical and fundamental analysts often use market caps to assess the price action and behavior of a coin or token. For example, high or low market caps usually indicate how resistant a currency is to volatility. Low market cap coins, in particular, are considered to be highly volatile as their price can be easily influenced by whales (large buyers or sellers).
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