Cryptocurrency prices are highly dynamic and can fluctuate frequently, influencing supply and demand. As with other markets, prices tend to rise when demand grows, and more users buy than sell the currency. Prices fall when selling pressure is greater than buying demand. Since the crypto market operates 24/7, prices can change rapidly at any given moment.

Cryptocurrency prices are prone to high volatility due to the market's dynamic nature and several influencing factors. Major news events like regulatory changes, exchange outages, project updates, and economic shifts can rapidly swing prices.

Speculation and hype on social media can also whip up market frenzies that spike volatility. The actions of "crypto whales" - large individual holders of coins - can greatly sway prices when they buy or sell.

Sharp changes in trading volumes and market liquidity affect volatility, especially for smaller-cap cryptocurrencies. Even meme and hype-driven forces can magnify price swings in the crypto space. The turbulent price moves characteristic of the cryptocurrency market make it a rollercoaster ride for traders and investors alike.

Market sentiment refers to the overall attitude and feeling that investors and traders have toward a particular cryptocurrency or the broader crypto market.

When sentiment is positive, people become more bullish, and prices tend to rise as more buy than sell. Negative sentiment leads to bearishness and drives prices down as market participants sell off their coins. Monitoring measures like the Crypto Fear and Greed Index can provide insight into prevailing market emotions.

There's, without a doubt, a correlation between the prices of cryptocurrencies and traditional stock market indices like the Nasdaq. During times of high volatility in the stock market, cryptocurrency prices often follow a similar pattern.

Bitcoin is sometimes referred to as "digital gold," but the jury is still out if it is a potential store of value and hedge against market downturns or still largely follows the ebbs and flows of the traditional stock market.

Overall, keeping an eye on the stock market can provide clues about where crypto prices may be headed. But, cryptocurrencies are a distinct asset class and can still diverge from stocks based on plenty of other reasons unique to the cryptocurrency ecosystem.

A cryptocurrency's market capitalization (or market cap) refers to its total market value based on the circulating supply of coins multiplied by the current price. Market cap is used to rank and compare cryptocurrencies by overall size.

High market cap coins like Bitcoin and Ethereum typically have greater network security and liquidity. We should note market cap doesn't necessarily indicate future growth potential. Lower-cap altcoins can see bigger price gains in bull markets. Comparing market caps against trading volumes paints a better picture of liquidity and interest. While an important metric, market cap should be viewed in context rather than the sole valuation method.