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Introduction
Like all financial assets, the price of a cryptocurrency is influenced by supply and demand. These forces, in turn, are often shaped by public opinion, news, social media, and investor psychology.

Many traders analyze the market’s sentiment to predict the short and mid-term potential of a crypto asset. Along with the technical and fundamental analysis, investigating the crypto market sentiment can be a valuable addition to a trader’s toolkit.

What Is Market Sentiment?
Market sentiment is the collective attitude of traders and investors towards a financial asset or market. The concept exists in all financial markets, including cryptocurrencies. Market sentiment does have the power to influence market cycles.

Introduction
When you buy and sell assets on a crypto exchange, the market prices are directly related to supply and demand. Apart from the price, other important factors to consider are trading volume, market liquidity, and order types. Depending on the market conditions and the order types you use, you won’t always get the price you want for a trade.

There is a constant negotiation between buyers and sellers that creates a spread between the two sides (bid-ask spread). Depending on the amount of an asset you want to trade and its volatility, you might also encounter slippage (more on this later). So to avoid any surprises, getting some basic knowledge of an exchange’s order book will go a long way.

What Is Bid-Ask Spread?
The bid-ask spread is the difference between the highest bid price and the lowest ask price of an order book. In traditional markets, the spread is often created by the market makers or broker liquidity providers. In crypto markets, the spread is a result of the difference between limit orders from buyers and sellers.

If you want to make an instant purchase, you need to accept the lowest ask price from a seller. If you’d like to make an instant sale, you’ll take the highest bid price from a buyer.

More liquid assets (like forex) have a narrower bid-ask spread, meaning buyers and sellers can execute their orders without causing significant changes in an asset’s price. This is due to a large volume of orders in the order book. A wider bid-ask spread will have more substantial price fluctuations when closing large volume orders.

Market Makers and Bid-Ask Spread
The concept of liquidity is essential to financial markets. If you try to trade on low-liquidity markets, you might find yourself waiting for a while until another trader matches your order.

Creating liquidity is important, but not all markets have enough liquidity from individual traders alone. In traditional markets, for example, brokers and market makers provide liquidity in return for bid-ask spread profits.

A market maker can take advantage of a bid-ask spread simply by buying and selling an asset simultaneously. By selling at the higher ask price and buying at the lower bid price over and over, market makers can take the spread as profit. Even a small spread can provide significant profits if traded in a large quantity all day. Assets in high demand have smaller spreads as market makers compete and narrow the spread.

For example, a market maker may simultaneously offer to purchase BNB for $800 per coin and sell BNB for $801, creating a $1 spread. Anyone who wants to trade instantly in the market will have to meet their positions. The spread is now profit for the market maker who sells what they buy and buys what they sell.

Depth Charts and Bid-Ask Spread

When you interact with Dolomite, for example, by depositing funds or opening a trade, the module layer combines your actions into a single operation. This operation is then executed by the core layer, which maintains the system’s security while still allowing it to improve over time.

Virtual liquidity system
Dolomite introduces a virtual liquidity system that pools all user deposits into a single Dolomite Balance. This balance works as a unified account that you can apply across the different services offered by the protocol.

Instead of transferring tokens on-chain each time you take an action, Dolomite records the changes internally. This design enables one token to serve multiple purposes simultaneously. You can earn lending interest on it, use it as collateral for borrowing, and also collect swap fees without needing to move it out of the system.

Behind the scenes, a smart contract updates its internal ledger to reflect these activities. By avoiding frequent on-chain transfers, the protocol reduces transaction costs and makes your capital more efficient. This approach also gives you greater flexibility and helps prevent liquidity from being locked during times of market stress, making it easier for you to manage your positions.

Key Features
Earn
The protocol provides multiple earning opportunities, including interest from lending, fees from liquidity provision, and potential returns from leveraged trading. Because of the virtual liquidity system, a single asset can work in several ways at once, allowing you to collect multiple types of yield at the same time.

Borrow
When you borrow on Dolomite, each position is isolated and managed separately. Your deposits are not automatically used as collateral, and you choose which assets to assign to a borrow position. This gives you more control over your risk, since a liquidation only affects the position involved while your other loans remain untouched.

What Is Bitcoin?
Bitcoin is essentially digital money. It is the first cryptocurrency ever created, announced in 2008 (and launched in 2009). Bitcoin allows users to send and receive digital money called bitcoins (with a lowercase b, or BTC for short).

Unlike traditional fiat currencies issued by governments (like dollars or euros), Bitcoin is decentralized, meaning no single institution, government, or entity controls it. Transactions are conducted peer-to-peer, removing the need for banks or financial institutions to act as intermediaries.

What makes Bitcoin highly appealing is its inherent resistance to censorship, the impossibility of double-spending funds, and the ability to conduct transactions anytime and anywhere.

How Does Bitcoin Work?
Bitcoin operates on blockchain technology, a public ledger that records all transactions. This means every Bitcoin transaction is transparent, verifiable, and secure.

Imagine blockchain as a chain of blocks, where each block holds information about transactions. Every time someone uses Bitcoin, their transaction is added to the blockchain, and this record is stored across a global network of computers (called nodes).

This distributed network ensures that no single party can manipulate the data. Anyone can participate in the ecosystem by downloading Bitcoin’s open-source software.

Introduction
When you buy and sell assets on a crypto exchange, the market prices are directly related to supply and demand. Apart from the price, other important factors to consider are trading volume, market liquidity, and order types. Depending on the market conditions and the order types you use, you won’t always get the price you want for a trade.

There is a constant negotiation between buyers and sellers that creates a spread between the two sides (bid-ask spread). Depending on the amount of an asset you want to trade and its volatility, you might also encounter slippage (more on this later). So to avoid any surprises, getting some basic knowledge of an exchange’s order book will go a long way.

What Is Bid-Ask Spread?
The bid-ask spread is the difference between the highest bid price and the lowest ask price of an order book. In traditional markets, the spread is often created by the market makers or broker liquidity providers. In crypto markets, the spread is a result of the difference between limit orders from buyers and sellers.

If you want to make an instant purchase, you need to accept the lowest ask price from a seller. If you’d like to make an instant sale, you’ll take the highest bid price from a buyer.

More liquid assets (like forex) have a narrower bid-ask spread, meaning buyers and sellers can execute their orders without causing significant changes in an asset’s price. This is due to a large volume of orders in the order book. A wider bid-ask spread will have more substantial price fluctuations when closing large volume orders.

Market Makers and Bid-Ask Spread
The concept of liquidity is essential to financial markets. If you try to trade on low-liquidity markets, you might find yourself waiting for a while until another trader matches your order.

Creating liquidity is important, but not all markets have enough liquidity from individual traders alone. In traditional markets, for example, brokers and market makers provide liquidity in return for arbitrage profits.

A market maker can take advantage of a bid-ask spread simply by buying and selling an asset simultaneously. By selling at the higher ask price and buying at the lower bid price over and over, market makers can take the spread as arbitrage profit. Even a small spread can provide significant profits if traded in a large quantity all day. Assets in high demand have smaller spreads as market makers compete and narrow the spread.

For example, a market maker may simultaneously offer to purchase BNB for $800 per coin and sell BNB for $801, creating a $1 spread. Anyone who wants to trade instantly in the market will have to meet their positions. The spread is now arbitrage profit for the market maker who sells what they buy and buys what they sell.

Depth Charts and Bid-Ask Spread
Let’s take a look at some real-world cryptocurrency examples and the relationship between volume, liquidity, and bid-ask spread. In Binance’s exchange UI, you can easily see the bid-ask spread by switching to the [Depth] chart view. This button is in the upper-right corner of the chart

Tokenomics refers to how a cryptocurrency’s economic model is designed. It describes the factors that impact a token’s use and value.

This can include things like the token’s creation, supply, distribution, key features, reward systems, and token burn schedules.

For crypto projects, well-designed tokenomics is critical to success. Assessing a project’s tokenomics before deciding to participate is common practice among investors and stakeholders.

81.5% of the total supply will be allocated to the community without any vesting periods or locks. Out of the 81.5%, 73% went to Telegram OGs who earned DOGS through the mini-app tasks and activities. The other 8.5% is allocated to rewards for sticker creators, traders, and future community members.

10% is allocated for the DOGS team and future project development, mostly with a 12-month vesting period.

8.5% is reserved for liquidity on centralized and decentralized exchanges or other liquidity-related events.

The Blockchain Mastery: From Fundamentals to Advanced Corporate Solutions course explores the dynamic world of digital finance. Dive into Bitcoin’s origins, the transformative rise of cryptocurrencies, and the innovative blockchain technology behind them. Gain insights into recent advancements, regulatory milestones, and diverse cryptocurrencies like Ethereum and Cardano. Demystify blockchain consensus mechanisms and explore topics such as DeFi, tokenomics, and smart contracts. Whether you’re a student or a professional, embark on this thrilling journey into the future of money with Prof. Schmalbach. This course offers a comprehensive understanding of the rapidly evolving landscape of digital assets and their implications for businesses and investors alike.