Normal distribution in cryptocurrency refers to the distribution of prices or returns of a particular cryptocurrency over time. In a normal distribution, the majority of data points cluster around the average value, with fewer data points further away from the average in a symmetrical pattern.
When a cryptocurrency follows a normal distribution, it means that most of the time, the price or returns of that cryptocurrency will fall within a certain range around the average value. This can be useful for traders and investors to understand the typical fluctuations in price or returns of a particular cryptocurrency and to make informed decisions based on that understanding.
While normal distribution is a theoretical concept and not all cryptocurrencies adhere to it perfectly due to various external factors influencing their prices, it can still provide a useful framework for analyzing and predicting the behavior of cryptocurrencies in the market. By studying the normal distribution of a cryptocurrency, traders and investors can gain insights into trends and potential future movements in its price.
