The signals behind Binance's "small coins flying everywhere"!

Today, the trading data leaderboard on Binance looks a bit "different." Instead of the usual large coins, some long-standing small coins have appeared on the gainers list, making today a day of "small coins flying around" on Binance.

It is reported that the phenomenon of "small coins flying around on Binance" is mainly concentrated in some smaller market cap cryptocurrencies, which have lower circulation and relatively limited market attention.
According to recent market data from Binance, these small-cap coins are often older coins that have been in the market for a long time. However, due to limited liquidity and decreased market interest, their prices have remained low for an extended period. Recently, these coins have suddenly become the focus of the market, with trading volumes surging and prices fluctuating wildly, suggesting that certain coins in the market may attract investors to trade through price volatility in order to profit from high fluctuations.

01

Common Characteristics Analysis

When analyzing these coins, we can see that they share several common points:
--- Low Market Cap
These coins typically have market caps at the bottom of the market, with most ranging from a few million to tens of millions of dollars. Due to their low market cap, any large inflow or outflow of funds can lead to significant price fluctuations.
--- Poor Liquidity
These coins have poor liquidity, meaning there is insufficient depth in the buy and sell orders in the market. When large transactions occur, prices can fluctuate dramatically. This low liquidity makes small-cap coins a breeding ground for short-term speculation.
--- Mainly Traded on Binance
Many small-cap coins are primarily traded on the Binance platform, which accounts for a large portion of the market share for these coins. This means that trading activities on the Binance platform have a significant impact on the prices of these coins.
--- Long-standing
In the above image, the earliest coin issued is SYS, released in 2014, followed by FLUX in 2018, and the remaining coins were issued around 2020.
--- Significant Price Movements
By checking, we can see that coins like DAR and TLM have very large price fluctuations, even exceeding a hundred times. Additionally, it is mentioned that some coins on the Binance platform, such as rare, have experienced similar drastic fluctuations, dropping from $5 to $0.051.

02 Binance Contract Project Market Performance

The reason why small coins not yet listed on contracts can attract market attention in a short time is mainly due to the market's pursuit of high volatility and high returns.
For some speculators, although these coins carry higher risks, they also offer the possibility of obtaining high returns.
However, this type of investment behavior is often short-term, and as market conditions change, funds can quickly withdraw, leading to another price crash for these coins.
In a deeper analysis of the contract projects of these small-cap coins on Binance, we can find that they mostly have the following characteristics:
First, low market cap and high volatility.
These coins have low market caps and extremely high volatility. Since they occupy a small share in the market, any movement of funds can have a huge impact on their prices. This makes them targets for speculation by some investors in uncertain market conditions.
Second, high FDV and low circulating supply.
Some projects have a very high Fully Diluted Valuation (FDV), while the actual circulating supply of tokens is very limited. This asymmetry leads to prices being easily pushed up quickly during bullish market sentiment. However, when a large number of tokens are unlocked and enter the market, prices often experience rapid corrections.
Mainly concentrated on trading platforms.
As one of the largest cryptocurrency trading platforms in the world, Binance attracts a large number of speculators. Most of these small-cap coins are concentrated on Binance for trading, while trading volumes on other platforms are relatively low, further amplifying their price fluctuations on the Binance platform.

Conclusion

The phenomenon of "small coins flying around on Binance" reflects the high volatility and potential risks of small-cap coins in the cryptocurrency market.
Behind this phenomenon is the market participants' pursuit of high returns and the concentrated trading behavior on the Binance platform. Although these small-cap coins provide opportunities for short-term speculators, their high-risk nature also makes them unstable factors in the market.
In facing these phenomena, investors need to remain rational, fully understand the driving factors behind the market, and manage risks effectively. Only in this way can they maintain an edge in the highly volatile cryptocurrency market.
In the future, as the market matures further and regulations strengthen, such phenomena may ease, but in the current market environment, investors still need to remain highly vigilant.