Are you new to cryptocurrencies and struggling to understand some terms , words and phrases? No worries, let’s dive into some of the most common ones and try to figure out them together. Please feel free to add any of your like!
Altcoin - A cryptocurrency other than Bitcoin, also known as “alts.” Coins like Litecoin, Ethereum, Ripple, and all other assets besides Bitcoin are known as alts.
Exchange - In terms of Crypto, a marketplace which allows buying and selling of Bitcoin or other
Blockchain - This is the technology that all cryptocurrency is built upon. As a form of a decentralized ledger, the blockchain is literally just what it says it is – a chain of blocks. Blocks are created by a consensus mechanism, whether it be through mining, staking, or another novel approach.
Total supply - The amount limit of coins that will ever exist. Supply limit of Bitcoin is 21 million.
Market Cap - The market capitalisation of an asset calculated by current supply of coins
multiplied by CMP of one coin.
Pump and Dump - This is a term borrowed from the stock market world, but it refers to artificial manipulation of the market by initially beefing up a worthless asset in order to increase it’s value. Once the value is increased, the pump and dump schemers immediately sell off (dump) the asset, causing everyone else to sell off, and the value decreased back to what it originally way before the artificial pump.
Day trading - Taking a position in the market, either buy or sell and exiting it the same day.
Swing trading - This method looks for buying and selling positions in a weekly range.
Leverage - Refers to the extra amount of asset bought or sold, over your capital
Margin- The amount of funds required to open a leveraged trade.
Long Position - This is a buy position buy with leverage.
Short Position - Exact opposite of Long Entry. You enter a short entry when you expect the
prices to fall.
Volatility- It is the percentage movement in price of an asset over a period.
Support and resistance - A support is a zone/line where we can expect the price to bounce back
up. Resistance is a line/zone where we can expect the price to rebound downwards.
Liquidity- The measure of how actively the coin is being traded in the market.
DYOR - An acronym that stands for “do your own research.” While this is not exclusive to the crypto world, you will definitely hear the term quite a bit around forums. You should always do your own research before you invest in any project.