BITCOIN: on a chart what does it mean for the USD price to be higher then marketcap?

Question

I'm looking at this chart and i don't rely understand why the USD price is at times lower and at times higher then the market-cap.

I would assume they are supposed to go in parallel since they are in direct proportion by the formula : circulating supply * price - but that is obviously not the case.

I assuming circulating supply(around 17 mil) only increases since more coins are being mined.

How can the market cap be lower, (or the same) when price goes up? Why is not always on top of the price line?

Also what is the interpretation in a crossing event like in the picture? Can this crossing of chart-lines be considered a signal to buy or sell bitcoin?

Answer 1

The blue and green curves have different vertical scales. One being "above" or "below" the other is just a matter of how the scales are chosen -- it's not a feature of the actual numbers being plotted.

In particular, the zero point of the blue scale is 115 vertical intervals beneath the bottom horizontal line on the graph (92000÷800=115), whereas the zero point of the green scale is 210 vertical intervals beneath the bottom (5250÷25=210).

So the blue and green graphs seem to show exactly the same variation (labeled in different units), but the blue one is compressed vertically.

You will notice that all of the crossovers happen at the same height. If you move one of the graphs a bit up or down, you could get them to happen at a different height instead.