Cryptocurrency is currently one of the most popular forms of investment. Due to its potential to yield high returns, many investors take the risk and time to learn the ins and outs of cryptocurrency.
For many, cryptocurrency is unfamiliar territory that can be confusing. This confusion can lead to mistakes when investing, especially for first-time investors.
Investors must know the terminology that is common among cryptocurrency investors.
What Does ATH Mean?
ATH stands for All-Time High in crypto. All crypto starts at a base price when listed on the market. But when it reaches its highest price or market capitalization, it will reach its all-time high.
As with other investments, the all-time high for crypto will vary often. Market conditions will fluctuate the price or capitalization of crypto. Many websites or blogs use ATH to report crypto and evaluate a particular asset.
What Determines the Price of an Asset?
Essentially it comes down to supply and demand. Market predictions and performance determine this.
Depending on the news about the financial market, it can either increase or decrease demand for an asset.
Much of this evaluation is based on context. If an asset is doing well in the market, people may report that the asset is projected to reach a new all-time high. Yet, it may be at an all-time low if it is not performing well.
Cryptocurrencies and Growth
Sometimes, a crypto asset will see a steady increase in its price. Yet there is no guarantee that an investment will exceed its ATH. Some may stay the same or decrease significantly. If an asset shows a consistent increase, it is usually a good sign that it will continue to grow.
Crypto assets will often see times of significant fluctuation. Investors may wonder what causes these fluctuations since these assets can prove to be more volatile than other forms of traditional investments.
Due to the influx of capital in the industry and the rise of prices for particular assets, interest in crypto causes intense growth. When these characteristics are not present, it will lead to a decrease in interest and cost.
An All-time Low?
With an all-time high can also come an all-time low (ATL). An ATL is the lowest price a crypto asset has reached in its lifetime. This is the very thing that investors do not want, but it still occurs.
If you see an asset reach an ATL, this may be a sign that you should not invest in that asset. The last thing any investor wants is to take too much risk. Investing money with little chance for recovery will not be in an investor’s best interest.
Following and Analyzing Data
Because crypto can be a volatile asset, it is essential to follow these metrics carefully. Metrics are never a guarantee, but they can provide helpful information so that you know when to invest or sell your assets to make earnings possibly.
An investor can see a crypto asset reach its ATH within the first week of its listing or several months later after the initial listing. Investors can never know what an investment will do, but just because there is no growth in a crypto asset’s initial listing does not mean it will not perform well.
Part of smart investing is knowing how to follow the data of assets. No one will ever be able to predict the future entirely, but there are a few ways investors can make intelligent decisions.
Researching the Market and Current Trends
One way is by research. If there is one thing investors need to do, it is to spend time doing their research. Many great resources are free and can help investors get an idea of what is in store for them when they begin to invest.
Another critical thing to do is to follow the market trends. This goes hand in hand with research. For example, in October, the price of Bitcoin dropped drastically.
This was due to large amounts of market fluctuations. With inflation on the rise and a trend of bad economic news, the overall value for different forms of crypto took a hit.
Some crypto, such as Bitcoin, are doing better than other forms due to investors staying committed for the long run. This helps the overall value of an asset to maintain a steady price, even if it decreases.
Thankfully, crypto, such as Bitcoin, did not reach an ATL. If it had, many investors would be in a tricky situation where they would have to decide what to do next.
ATH Beyond Crypto
ATH is a term that is also used for other assets other than crypto. The same idea applies to various assets. When an asset hits its highest price or market capitalization, it will be at its ATH. Whereas when it reaches its lowest, it will be at its ATL.
Like in crypto, ATH and ATL are good indicators of whether or not to invest in an asset. Thorough research and time will help an investor to decide whether or not they should invest.
If the price hits an ATH and maintains a steady price, it might inform you to either sell the asset or hold onto it for its maintenance. If it is at its ATL, it may be best to buy more if you hope for its rise or just lay low to see the trends.
The Bottom Line
Knowledge is vital when investing in cryptocurrency. It is essential for effective research and can help you make intelligent decisions whether you are a beginner or a seasoned investor.
ATH communicates a healthy asset with potential for significant growth, while ATL signals volatile support that is probably best not to invest in. These two terms can help you navigate the market of cryptocurrency.
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