The Illusion Factor in Cryptocurrencies

Before you enter any currency, you need to know something important: Illusion = Market Cap ÷ Actual Liquidity (Order Book / Depth)

The lower we go in the ranking of currencies → the illusion grows

Advanced currencies:

•Higher liquidity

•Deeper order book depth

•Less control from small whales

Lagging currencies:

•Market Cap built on few trades

•Fragile order book

•Any average order = Pump or Dump

The illusion here is not just in the price, but extends to:

•Trust

•The project itself

•Expected future

•And even technical analysis

Do not consider it a rigid equation, but rather an important mental indicator:

•Sometimes liquidity is concentrated at certain levels

•Sometimes Market Cap is low but trading is active (accumulation phase)

•Sometimes the currency is large but liquidity is intentionally drained

The illusion correlates directly with the gap between the actual traded value and the theoretically presented value.

⏱ The illusion factor is dynamic:

It grows during:

1.Panic

2.Drop

3.Liquidity withdrawal

4.Negative news

It shrinks during:

1.FOMO/Fear

2.Institutional entry

3.Strong news

Before you enter any currency, filter your mind first in terms of liquidity and order book depth. This is a simple step but it protects you from being deceived by market illusions, which are often accounted for.