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80 Crypto Trading Terms You Must Know

So, you have started to get acquainted with the crypto market but there are still some crypto trading terms or abbreviations whose real meaning you don’t understand? You came to the right place because, in this article, we will explain the most used expressions in the simplest possible way. Without further ado, let’s dive into […]

The post 80 Crypto Trading Terms You Must Know appeared first on Cryptocointrade.

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So, you have started to get acquainted with the crypto market but there are still some crypto trading terms or abbreviations whose real meaning you don’t understand? You came to the right place because, in this article, we will explain the most used expressions in the simplest possible way.

Without further ado, let’s dive into it.

1. Trading Bot

Aa automated software which places buy and sell orders on exchanges on the behalf of the trader.

2. API

API or Application Programming Interface is a way for various components to communicate with each other. In crypto, API is the system that enables a program (for example, trading bot) to communicate with the user’s exchange account or crypto wallet.

3. Automated Trading

In automated trading, traders set up a specific set of rules for entries and exits that are then automatically carried out by a pre-programmed computer.

4. Backtesting

Once a trader devises a trading strategy, he can test it on some past market timeframes, which is called backtesting.

5. Trading Signal

A signal for market action. Be it to place a buy or sell order, a trading signal is always based on some form of analysis (fundamental or technical).

6. Trading Products/Instruments/Features

Crypto trading products are everything you can trade in the market – bonds, stocks, CFDs, ETFs, futures, etc.

7. Leverage

When trading with leverage, a trader who already has funds he’s going to invest, basically borrows the extra cash from the exchange or a broker to enhance his gains.

8. Go long

Going long is buying a cryptocurrency with the intention of selling it at a higher price. One of the most important crypto trading terms.

9. Go short

Going short is selling a cryptocurrency with the intention of re-buying it at a lower price and lock the profit from the price spread.

10. Derivative trading

All types of trading that don’t include owning the traded asset are called derivative trading, such as Bitcoin CFDs, ETFs, BTC futures contracts, etc.

11. Futures trading

Futures trading is when a buyer and a seller make a contract to buy and sell a cryptocurrency at a pre-determined price on a pre-determined date.

12. Swaps trading

Swap trading is when a trader trades an asset without going on a platform owned by a third party (e.g. exchange).

13. Stop loss

A sell order placed below the buying value of the cryptocurrency to stop a trader from losing more money if the price starts declining.

14. Margin Trading

Like leverage trading, margin trading refers to borrowing money to trade an asset.

15. Margin Balance

The amount a trader borrows to do margin trading.

16. Margin Order

Placing a buying or selling order with a certain amount borrowed from an exchange or a broker.

17. Interest rates on leverage trading

Just like with a bank loan, when trading with a borrowed money, a trader needs to return the loaned funds to the broker or the exchange with interests.

18. Liquidation Level

A level (the exact amount of funds in trader’s account) at which liquidation process is automatically executed at the best available exchange rate. One of the most important crypto trading terms.

19. Guarantee Stop loss

A stop-loss order that guarantees that a cryptocurrency will be sold at that exact pre-determined price. Some CFD trading platforms does offer this feature.

20. Auto Deleveraging (ADL)

Or ADL is a case the exchange or a broker automatically deleverages trader #2 if a trader #1 cannot fill the liquidation. This feature can only be found on certain trading platforms and eToro is a great example.

21. Negative Balance Protection

An automatic system which ensures that a trader trading with leverage doesn’t lose more money than he initially deposited.

22. Trading strategies

A pre-determined set of rules by which a trader behaves in the market.

23. Day trading

A strategy where all buy and sell orders are closed inside a single market session (a day).

24. Swing trading

A strategy where traders take longer time (usually more than a couple of weeks) to close their trading plan.

25. Arbitrage trading

A trading strategy implemented by traders which look to profit from a spread between the price of a cryptocurrency on various exchanges or of the differing ration between more than two coins on a single exchange.

26. HODL

Initially a typo but now considered to mean Hold On for Dear Life means buying and keeping a cryptocurrency for a longer period of time (usually more than a year) in a hope that it will reach some pre-determined price. One of the funniest crypto trading terms.

27. Technical Analysis (TA)

Used for shorter-term trading, Technical analysis is an implementation of various tools on a trading chart in order to discover future market movements. This is an important resource for everyone learning about the crypto market. If you’re interested, you can read our Technical Analysis here.

28. Technical Indicator

A visual representation of an analytical mathematical calculation shown in the cryptocurrency trading chart.

29. Moving Average Convergence Divergence (MACD)

A technical indicator which calculates the difference between cryptocurrency’s 26-day and 12-day Exponential Moving Averages (EMA), with both using closing prices of the measured period.

30. Bollinger Band

A combination of the 20-day Exponential Moving Average (EMA) and two related bands forming a channel which represents the price volatility.

31. Relative Strength Index (RSI)

A momentum indicator, depicted as an oscillator below the trading chart, providing a clear picture if a cryptocurrency is overbought or oversold. It has values between 0 and 100 and moves between those two extremes.

32. Average Directional Index (ADX)

A technical analysis tool used by traders to determine the overall strength of a current trend a cryptocurrency follows in the market.

33. Trading Chart/Graph

A visual representation of a crypto’s price movement, mostly by “candlesticks”.

34. Time interval

The amount of information contained by a single candlestick. In the 15-minutes interval, a single candlestick is going to represent what happened to the price of a cryptocurrency during a period of 15 minutes.

35. Candlesticks

A visual representation of a spread between the opening and closing price of a cryptocurrency during a certain time interval in the chart. A red candlestick means that the price declined while a green one represents positive price movement. This one is among the most important crypto trading terms.

36. Support

The support is the price point where, during the declining price movement, buyers start pushing the price of the cryptocurrency back upwards.

37. Resistance

The price point where sellers, during the rising price movement, start pushing the price back down.

38. Opening price

The price at which an asset begins trading in at the beginning of a trading day. In crypto, since the market is opened 24/7, can refer to the price at the beginning of the calendar day.

39. Closing Price

The price at which an asset ends trading in at the end of a trading day. In crypto, since the market is opened 24/7, can refer to the price at the end of the calendar day in a daily chart.

40. Fundamental Analysis

An analysis performed over the fundamental features of a cryptocurrency and its underlying project to discover its long-term potential (e.g. market competition, development team, regulatory environment, marketing potential, etc.). One of the most important crypto trading terms for those who are learning the trade. You can read our updated Fundamental Analysis here.

41. Social Trading and Copy Trading

Social trading is when investors enable each other to “see” their trades and strategies on online platforms. In turn, that enables copy/mirror trading where investors literally copy each other’s market moves. Etoro is the best example of a social trading platform.

42. Pump and Dump

A market event when the price of a single cryptocurrency suddenly surges pushed up by an unsuspecting buying wave just to be pushed back down by an even heavier selling session, making those that invested near the peak lose a lot of money.

43. Order Book

A section of the exchange where all active buy and sell orders can be seen.

44. Limit Price

Prices at which buyers and sellers place their orders that cannot be immediately filled since they differ from the current market price. One of the most important crypto trading terms.

45. Market Price

The last value a cryptocurrency has been sold/bought for.

46. Fill or Kill

An order which is terminated unless it has been immediately filled.

47. Stop-limit

A conditional trade tactic implemented over an established timeframe combining stop and limit orders with the aim of lowering the risk, mostly implemented in automated trading and trading bots.

48. Trailing Stop

A series of stop-loss orders placed strategically over a declining price range.

49. Order History

Compiled information on all filled orders a trader made on the trading platform.

50. ICO

Initial Coin Offering is a way for companies to fund their ventures by selling their utility tokens to private and institutional investors before releasing them on the open market.

51. Token

Representation of value inside the network. Contrary to coins, tokens enable their owners to participate in the network.

52. Coin

Similarly, to tokes, it is the representation of the value inside the network but does not give the user the power to participate in the network.

53. Ticker Symbol

Abbreviation of the asset’s name (e.g. Bitcoin – BTC).

54. Wallet

A piece of software or hardware which holds private keys that give the user access to his funds.

55. CFD trading

CFD trading is when a broker and a trader sign a contract agreeing to exchange the difference in the value of a cryptocurrency at the end of the contract.

56. Demo trading account

AN account on a trading platform showcasing the user experience and interface where traders can trade fake (worthless) money in the real market conditions.

57. Fiat currencies

Inconvertible currencies made legal by governments (e.g. US dollar, Euro, etc.).

58. ID verification

Verification on the trading platform or similar third party service by personal identification.

59. KYC

Know your customer/client policy implemented usually by trading platforms to be able to trace deposited and withdrawn funds.

60. AML

Anti-money laundering policy also implemented usually by trading platforms in order to prevent illegal practices.

61. Multisig

Multi-signature means that something needs more than one permission to be used.

62. 2FA (two-factor authentification)

A software way of ensuring the safety of a trading account by connecting it with some other device (e.g. smartphone) through an ever-changing series of digits.

63. Private keys

A secret phrase of numbers and letters that allows an owner to access his funds on the blockchain.

64. Market Maker

A person who trades by not taking already placed trade orders but making his own which will be fulfilled in the future (maybe a minute, an hour, or even longer period of time). These individuals usually enjoy lower trading fees.

65. Market Taker

A trader who takes already placed trade orders.

66. Spread

The difference between the highest bid price and the lowest sell price. One of the most important crypto trading terms.

67. Deposits SEPA, Wire transfer

Traditional ways of money transfer. Usually, from a bank to exchange.

68. Proof of Work

PoW is a consensus reaching mechanism on the blockchain-based network used by some of the biggest cryptocurrencies like Bitcoin, Ethereum, etc. Needs a lot of computational power in the form of mining rigs and ASIC miners.

69. Proof of Stake

PoS is a consensus reaching mechanism on the blockchain-based network. Used in various forms by EOS, NEO, etc. Owners stake their coins/tokens in their wallets to secure the network and, in turn, receive rewards in crypto.

70. Volatility

Liability to rapidly change value. Small market caps tends to have greater volatility.

71. Liquidity

The degree to which a cryptocurrency can quickly be bought or sold in the market. The more people trade an asset the more liquid it is.

72. Bull market

A prolonged period of a positive market sentiment when prices tend to rise.

73. Bear market

A prolonged period of a negative market sentiment when prices tend to decline.

74. Market cap

Market capitalization is a number we get when we multiply the number of units of the cryptocurrency present in the open market with the price of a single unit. Represents the “power” of the cryptocurrency.

75. Inflation

A decrease in the purchasing power of the asset caused by new units entering the market. Usually expressed in percentages. Mineable cryptocurrencies have an inflation while pre-mined doesn’t.

76. Hard fork

An event when a single blockchain, through a certain software upgrade, gets split into two and both versions remain relevant in the market. Can happen when a development team behind the project disagrees on the future of the project and decides to go separate ways (e.g. Bitcoin – Bitcoin Cash or Bitcoin ABC – BItcoin SV).

77. Mining

Using hardware to solve mathematical tasks in order to validate transactions on the network in PoW systems and, in turn, receive rewards for the service.

78. Mining Reward

A cryptocurrency reward that’s given to an individual for verifying transactions on the blockchain-based network.

79. Mining Difficulty

A value representing how hard it is to validate a transaction on the blockchain and is determined by an overall hash rate on the network and network’s global mining difficulty.

80. Network fee

A fee paid by an individual for doing transactions on the network. This is usually received by the miners or those who stake their coins or lock them up in a masternode.

Source: https://www.cryptocointrade.com/crypto-trading-blog/crypto-trading-terms-glossary/?utm_source=rss&utm_medium=rss&utm_campaign=crypto-trading-terms-glossary

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Opimas estimates that over US$190 billion worth of Bitcoin is currently at risk due to subpar safekeeping

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May 2021. Safekeeping of cryptocurrencies presents a challenge for institutions holding cryptocurrencies on their clients’ behalf. Cryptocurrency transactions are irreversible and anyone with full access to a wallet’s private key controls the cryptocurrencies that reside within it. Frighteningly, a number of institutional participants and even some large cryptocurrency exchanges rely on subpar custody approaches, leading Opimas to estimate that over US$190 billion worth of Bitcoin is currently at risk due to subpar safekeeping.

Luckily, a number of companies have emerged to address this problem. A new research report from Opimas—Crypto Custody: No More Excuses, authored by analysts Suzannah Balluffi and Anne-Laure Foubert—looks at the landscape of cryptocurrency custody-enabling technology providers and institutional-grade cryptocurrency custodians as well as the size of the market for cryptocurrency custody and brokerage services.

Some key findings in the report include:

Many of even the largest holders of Bitcoin and other digital assets continue to rely on storage devices meant for individual investors. Although some of these self-custody devices and wallets are secure and reputable, the operational risk posed by this approach is significant for institutional investors. Furthermore, a chunk of institutionals’ cryptocurrency holdings sit in hot wallets on exchanges. In total, about 22% of institutional cryptocurrency holdings are safeguarded in these relatively risky manners (Figure 1).

Figure 1. CUSTODY METHODS UTILIZED BY INSTITUTIONAL INVESTORS 

 

Source: Opimas analysis.

There are no more excuses for lackadaisical safekeeping – institutions can now choose from several reputable cryptocurrency custody-enabling technology providers and institutional-grade cryptocurrency custodians. Yet no custody solution is equal – there is still no best practice when it comes to security and governance relating to private keys. For example, some providers may rely on time-tested Hardware Security Modules (HSMs), while others use a newer technology known as Multi-Party Computation (MPC) – see Figure 2.

Figure 2. A COMPARISON OF HSM AND MPC TECHNOLOGY PROVIDERS

Source: Ledger, Fireblocks, Opimas analysis.

Some cryptocurrency custodians have followed in the footsteps of traditional capital markets by adding prime brokerage services to their offerings, including trading and settlement, lending, margin finance, staking, reporting, and capital introduction services. Opimas estimates that the current annual revenues generated by the institutional crypto brokerage and custody market are roughly US$2 billion and will grow to nearly US$8 billion by 2026 – a sizeable portion of this coming from brokerage services (Figure 3).

FIGURE 3. THE MARKET FOR CRYPTO CUSTODY & PRIME BROKERAGE SERVICES IS GROWING 

Source:  Opimas analysis. 

  • Regulations surrounding institutions’ ability to store cryptocurrency have become clearer (and in some cases more favorable) in numerous jurisdictions. Notably, the Office of the Comptroller of the Currency (OCC) ruling in the US has allowed banks to store cryptocurrencies for their customers. This regulatory clarity has led a number of financial institutions around the world to provide trading and custody for digital assets. With the advances in brokerage and custody solutions, Opimas expects institutional cryptocurrency holdings to grow from 20% of the cryptocurrency market cap to over 50% by 2026 (Figure 4).

FIGURE 4. INstitutional cryptocurrency holdings over time 

Source:  Opimas analysis.

Source: PlatoData Intelligence

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Bitcoin (BTC) Price Prediction: BTC/USD Faces Rejection Thrice at the $60,000 Resistance Zone, Resumes Downward Correction

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Bitcoin (BTC) Price Prediction – May 9, 2021
Bitcoin bulls have broken above the $58,000 resistance but the bullish momentum could not be sustained. Today, BTC/USD traded as price reached the high of $59,450. The king coin is likely to retrace to $57,000 low if the bulls fail to break the $60,000 psychological price level.

Resistance Levels: $65,000, $70,000, $75,000
Support Levels: $50,000, $45,000, $40,000

BTC/USD – Daily Chart

Bitcoin price was rejected thrice at the $60,000 resistance level. Buyers made frantic efforts to sustain the bullish momentum above the recent high but were repelled by overwhelming selling pressure. Consequently, Bitcoin has resumed a downward move as a result of a strong rejection at the resistance of $59,200. The current retracement will extend to the low of $57,000. Nevertheless, if price breaks below the $57,000 support, the market will continue the downward move. That is, the selling pressure will extend to the low of $53,000. On the upside, if price retraces and finds support above $58,000, the upside momentum will resume.

Bank of England Governor Warns on Crypto Investment
Andrew Bailey is the governor of the Bank of England who has warned crypto investors of the inherent dangers of cryptocurrency investment. The governor argued that cryptocurrencies lacked intrinsic value. According to him, “I would only emphasize what I’ve said quite a few times in recent years, [and] I’m afraid they have no intrinsic value. I’m sorry; I’m going to say this very bluntly again: Buy them only if you’re prepared to lose all your money.” Bailey’s comments are coming at a time when crypto markets are characterized by a huge spike in crypto prices. Major altcoins such as Polkadot, Chainlink, and XRP have also seen vertical price actions.

BTC/USD – 4 Hour Chart

Bitcoin risks another downward correction as the king coin faces stiff rejection at the $59,450 resistance. The Fibonacci tool has already indicated a marginal upward move of Bitcoin and a possible reversal. On May 1 uptrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that Bitcoin will rise to level 1. 272 Fibonacci extension or the high of $59,819.90. From the price action, BTC price has reached a high of $59,450 and has commenced a downward move.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://insidebitcoins.com/news/bitcoin-btc-price-prediction-btc-usd-faces-rejection-thrice-at-the-60000-resistance-zone-resumes-downward-correction

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Dogecoin dumps following mention from Elon Musk on Saturday Night Live

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Meme cryptocurrency Dogecoin finally got its long-awaited shoutout on Saturday Night Live — but despite hodler hopes, the immediate result has been a violent dump.

First teased by entrepreneur and DOGE cheerleader Elon Musk in late April, the Tesla CEO finally mentioned the digital asset on live television tonight in his opening monologue of the sketch comedy show. The reference was a throwaway line from Musk’s mother, who joined him onstage and asked if her Mother’s Day gift would be Dogecoin; Musk replied that it would be. 

In the minutes afterwards, $DOGE dumped upwards of 25%, falling as low as $.50 from $.66 highs at the start of the show. It has since partially recovered, trading at $.52 at the time of publication.

An hour before the episode began, the price of DOGE sat at $.66, down from an all-time high of $.72. A pair of bearish headwinds may have shared responsibility for the pullback: Musk himself seemed to try and get ahead of the hype, urging followers in a Tweet to “invest with caution,” and a host of new data indicates that many investors may be rolling their DOGE profits into other, largecap digital assets

Additionally, Barry Silbert — the founder and CEO of Digital Currency Group, the parent company of crypto investment vehicle company Grayscale — announced a public short on DOGE via the FTX exchange. In a series of follow-up Tweets, he revealed that the position was $1 million in size, and that any proceeds or remaining funds after closing the short would be donated to charity. 

(It’s unclear if Silbert was is using “we” in reference to Digital Currency Group, one of its portfolio companies, or is simply and bizarrely using a plural pronoun in reference to himself). 

Many DOGE investors were nonetheless holding out hope for a high-profile shoutout on what looked to be a major pop culture event. NBC, the studio behind SNL, chose for the first time ever to live-stream the episode on Youtube, per the Wall Street Journal.

Even a mention could have significant impact on the price of DOGE as well: the meme currency has proven to be susceptible to price movements based on positive social media volume, and multiple studies have shown that Tweets from Musk often lead to price appreciation. A mention on an even bigger platform was thought to potentially lead to even greater gains. 

Leading into the premier of the episode, Alameda Research trader Sam Trabucco (who said in a previous Tweet that he was “studying the typical SNL episode structure to try and understand when a DOGE mention would be the most natural”) speculated that if a joke or mention didn’t come in Musk’s opening monologue, it would be “all over.”

Despite arriving during the monologue, traders nonetheless responded negatively. It remains to be seen if a DOGE-centric skit later in the show can perhaps turn the speculative asset’s fortunes around.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/dogecoin-dumps-following-mention-from-elon-musk-on-saturday-night-live

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