LEOPedia: Common Terms to know in Cryptocurrency

in LeoFinance2 months ago (edited)

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Cryptocurrency trading simply refers to the buying and selling of cryptocurrency or digital assets in such a way that the trader or investor makes meaningful profits. Basically, the concept of cryptocurrency trading is that one buys low and sells high, that is, one buys an asset when its price is low and then hodls and sells off when there is an increase in the price of the asset. The asset could be Bitcoin, Hive, Hive Dollars, Ethereum etc. It should also be noted that cryptocurrency trading is usually being done on a cryptocurrency exchange like Binance, Poloniex, Okex, BitFxt and the likes.

Moving forward, there are basically two types of analysis that helps a cryptocurrency investor or trader to make the right market decisions that is, buying and selling. One should not just buy any asset; before buying an asset, one should do well to fully understand the project. Also, the cryptocurrency market/price is usually being affected by information and/ news. So, the two types of analysis are: Technical Analysis and Fundamental Analysis. A basic knowledge of both analysis is required to be a profitable cryptocurrency trader or investor.

It is worthy of note that, Technical Analysis known as TA simply refers to charting. It has to do with reading and interpretation of market charts to know the right entry and exit prices, with the help of indicators like Relative Strength Index (RSI), Moving Average (MA), Bollinger Bands (BB), Moving Average Convergence Divergence (MACD) and others. While Fundamental Analysis, FA basically deals with obtaining information and news, could be from the project team or the social media.

AltCoins
This is a short form of the term "Alternative Coins". By definition, altcoins are simply cryptocurrencies other than Bitcoin. The era of cryptocurrency and blockchain technology begun way back 2009 following the invention of the first-ever cryptocurrency called Bitcoin. Ever since the creation of Bitcoin by Satashi Nakamoto, other coins were created as alternatives example, Ethereum, Ripple, LEO, Hive Dollars, Litecoin, Dash, Monero etc. There are over 5000 altcoins according to Coinmarketcap statistics.

Stable Coins
As the name implies, stable coins are cryptocurrencies that do not have high fluctuations in terms of price movements. In other words, cryptocurrencies that are not highly volatile when it comes to price. One key characteristics of cryptocurrency is that there's a high volatility in its prices. For instance, days ago, Bitcoin rose has high as $48,000 and then fell down to around $44,300 in few hours. We see a difference of about $3700. Whereas stable coins like TetherUs (USDT), BUSD, DAI were created such that their price is always around $1. So, if you do want to keep your money in your local currency like Naira, you simply convert it to any of these stable coins to avoid devaluation.

Trading Pair
In the cryptocurrency market, not all cryptocurrencies or Fiat can be used to purchase the other. So, trading pair speaks volume of two assets that can be traded for each other. For instance, on Binance, you cannot buy TetherUs directly with Steem but you can buy Bitcoin directly using Steem. Trading pairs are usually presented in this manner; BTC/Hive, BTC/ETH, Tron/BTT, ETH/USDT etc.

Bagholder
This refers to someone holding onto a coin that has already plummeted in price with the hope that it will come in handy someday.

HODL
This term originated from the bitcointalk chat forum years ago and it was a mere misspelling or typo of the word hold. Someone mistakenly wrote HODL instead of HOLD and ever since then, HODL was being adopted to mean holding onto an asset till its price moons. Mooning refers to a price surge.

Bear/Bearish
This is the opposite of Bull/Bullish. Bears refers to traders who dump their coins for the purpose of causing the price of the coin to fall further. So, a bearish market is a red market; a market where price is gradually dipping to attain new bottoms.

Bull/Bullish
Bulls are those who pump coins by constantly buying the coins such that it keeps hitting new all-time high prices. Hence, a bullish run or market is a green market. In a bullish market, cryptocurrency prices are always going up.

FUD
This simply refers to fear, uncertainty and doubt. It is a trading psychology where people are made to believe that a particular asset will dump in price such that they panic sell. It could be a release of some fake news or information like CoinTelegraph did recently when it spoke of a bitcoin double-spending. FUD usually favours those who spread it because they end up buying the dip.

There are many other cryptocurrency terms and slangs that a trader or investor should get conversant with so has not to be lost in the space.

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Interesting lecture for crypto starters. A #leopedia would have been appropriate for this post.

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Ooops..

Edited

Thanks for the tip

I think we need a second layer community that will be costumed to reward #tutorials and #Cryptoeducation posts like this.

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