CryptoURANUS Economics: ATH: Defined in CryptoCurrency

CryptoCurrencies


Thursday, August 2, 2018

ATH: Defined in CryptoCurrency

ATH: Defined in CryptoCurrency



What is Record High:
ATH: Defined in CryptoCurrency as the term “All-Time-High” relates to the highest price that an asset has achieved on an exchange, for the current trading pair that is being referenced.

For example, if a share of stock in XZY Corp comes to IPO at a price of $5 per share, then trades as high as $20 per share, before falling to $10 in a certain period of time, we could say that the “All-Time High” for the XZY Corp share price was $20.

In the bull-run of late 2017, many cryptocurrencies set new All-Time High records, with Bitcoin setting a new ATH in mid-December.

Each cryptocurrency exchange has a different ATH value for Bitcoin. In some markets, each coin was being traded above the mark of $20,000, but many consider that Bitcoin’s ATH was approximately $19,665.

The ATH value represents the theoretical maximum price that one could have sold the particular asset for, and also represents the maximum price that another trader was willing to pay for that asset, during that period.


However, given the fractional nature of most digital assets, it is possible that the ATH was derived through the trade of a fraction of an asset, rather than a full coin or token.

For example, during the height of a bull-run, a trader may make a purchase of 0.1BTC for $5,000 just before a big drop.

Proportionally speaking, this would give Bitcoin a new ATH at the price of $50,000 per unit of BTC, although only 0.1 BTC ever traded at that price.

The concept of All-Time High may also be applied to the values of market capitalization (market cap).

In early January 2018 - a couple of weeks after Bitcoin’s ATH - the market cap of the entire cryptocurrency market reached an ATH of about $661.2 billion.

The opposite of ATH is the “All Time Low” (ATL) which is used to refer to the lowest price point an asset has traded at, typically only recorded after an asset is listed and begins trading on an exchange.

Another similar perspective:

A record high is the highest historical price level reached by a security, commodity or index during trading.

The record high is measured from when the instrument first starts trading and updates whenever the last record high is exceeded.

The values for record highs are usually nominal, which means they do not account for inflation.


BREAKING DOWN Record High:

All-time record highs typically represent significant price news for companies and markets.

Investors may be enticed to purchase stock, believing this company will continue to perform well in the future.

Companies that constantly reach record highs quickly catch the eyes of prospective investors, while those who repeatedly hit record lows tend to scare off buyers. On the other hand, investors employing a more contrarian strategy may look at record highs as an indicator that a stock will go down in price, presenting an opportunity for shorts.

Many investors will sell out of a "fear of heights," especially repeated record highs, if a stock starts edging upward into uncharted territory.

Some economists say this is because record highs feel and sound unnatural to investors, even though achieving a record high can be viewed simply an example of a market or security doing exactly what it is supposed to do, as long as the government keeps printing money and the economy keeps growing.

Price increases don't always go up in a straight line, and overall, prices go up more than down, so when someone sells at a record high, the odds are not in their favor.

The Psychological Trap of Record High vs. Cost Basis:

As a market or stock moves higher, more investors get locked into the psychological trap of not buying back in after taking profits because a stock's price is higher than when they sold.

Economists and analysts point to the fact that human beings are behaviorally predisposed to latching onto the price at which a stock is bought.

This study basing those decisions on how the current price compares with their cost basis.

Preferred method is an unemotional approach to buying and selling should be more a question of a stock's current valuation, not historical price.


Of course whether a price is at a record high or low, a smart investor will also look at the business prospects of a company.

If it is well run, and business prospects for the company appear to be in line with future growth, it may make sense to ignore the distraction that a record high or low may be.

There are so many factors that play into the price of a stock, and often times, company financial fundamentals and business health aren't always what investors react t

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