The Crypto Glossary
Glossary: All the vocabulary of Crypto!
By Crypto Nation – February 2, 2020
The crypto universe can seem very technical at first glance, so cryptocurrencies and blockchains can scare many people and the vocabulary used can seem intimidating. But rest assured, nothing complicated there, the terms used in this environment are often imaged and therefore easy to remember quickly.
A rich vocabulary!
Let’s review together this beautiful vocabulary that is used in the world of cryptocurrency and blockchains. Discover the meaning of certain expressions that you will not hear anywhere else… Even reduced to the appearance of a dictionary, the world of crypto knows how to be interesting!
Thank you to our partner Zone9 for helping us to complete this beautiful crypto glossary!
A
- Airdrop: Free distribution of a certain amount of a cryptocurrency. Often initiated by the creators of a project towards their community. This generally makes it possible to make part of the supply liquid, during the launch of a new crypto project for example.
- Altcoin: Refers to so-called alternative cryptocurrencies, this refers to any other cryptocurrency than Bitcoin.
- Alts Season: Term used by the crypto community to describe a strong uptrend on altcoins that supercharge Bitcoin.
- Apex: Crossing point of 2 lines which form a chartist figure.
- Arbitrage: Take advantage of the price differential of the same cryptocurrency on two different trading platforms. A trader can thus buy on one platform, and resell more expensive on another. You still have to pay attention to the fees (withdrawal, and exchange).
- Ask: Refers to the purchase price of an asset in the market, i.e. demand. It is the reverse of Bid.
- ATH: All Time High; the highest price an asset has ever been. The asset goes on price discovery.
- ATL: All Time Low; the lowest of all time, the asset achieves an unprecedented low.
B
- Bollinger Bands: Trading tool developed by John Bollinger. This indicator provides a dynamic measure of two elements: price volatility and directionality. When volatility and directionality strongly increase, the price breaks out of the bands. This is a rare event since statistically the price only comes out of the bands about 5% of the time.
- Bankroll (BR): This is your trading capital, the size of your account.
- Bearish (Bear): A market is bearish when it is dominated by bears. That is to say that the sellers are more numerous, and stronger than the buyers (opposite of Bullish, bull). This therefore indicates a downward trend in a price. The bear metaphor is used to characterize a bear market due to the way a bear fights. This one attacks his opponent with his front legs, kicking up and down.
- Bear Market: Downtrend.
- Bid: The price where you want to buy a cryptocurrency. Opposite of Ask, which is the demand, and the offered selling price.
- Bitcoin Dominance: Bitcoin represents the largest daily trading volume in the crypto market. The Bitcoin Dominance represents the strength of Bitcoin over other cryptos. Its calculation is simple, it is the ratio between the Market Cap of Bitcoin compared to that of the rest of the crypto market. Thus, during an Alt Season, the Bitcoin Dominance drops severely as the money moves in the alts.
- Blacksmith: Can be assimilated to a miner, except that the latter contributes to the protocol of a blockchain based on a Proof of Stake mechanism, and not Proof of Work. It is a person who participates in the creation of the blocks of a PoS blockchain. This is chosen by the algorithm at random to forge the next block in the chain. The more tokens a forger has from the blockchain in question, the more likely they are to be selected to forge the next block. They will then be paid for each block that They had managed to forge and validate.
- Block: A block is the main and fundamental element of a Blockchain.
Each block contains a set of transactions, and certifies the accuracy of data validated by various consensus.
It also contains a “header” which includes the timestamp of the creation of the block as well as a reference to the previous block.
- Blockchain: Is a technology for storing and certifying data. It takes the form of a huge database made up of blocks, which are cryptographically linked to each other. The vocation of the Blockchain is to be decentralized, because everyone can contribute to it by participating in the creation of new blocks that are added to the chain. All this is defined according to a very strict protocol specific to each blockchain, and operating according to different consensuses. Cryptocurrencies show the first viable application of blockchain technology. But this technology will be present in many other use cases in the future.
- Bullish: What we all expect. The domination of the market by bulls. This indicates a strong presence of buyers, and thus an uptrend in the price of a market. The metaphor here is the mad charge of the bull, with its horns pointed in the direction of its goal.
- Bull Market: Trending upwards.
- Burn: It means the act of burning, deleting, a certain amount of a cryptocurrency, in order to lower the total available supply of it.
Technically, this process is done by sending the tokens to be burned to a public address whose private key no one knows. Which is similar to closing a safe to which no one has the key, and thus making that cryptocurrency safe forever sealed, and therefore unusable.
This phenomenon creates, or corrects, an imbalance between supply and demand, which tends to generally participate in the increase in the value of the crypto project in question.
C
- Chart: Representation of the price of an asset in the form of a chart.
- Chartism: Chartist figures are technical configurations connecting high/low points on a price chart. These peaks and valleys are used to draw resistance or support lines. It is the crossing of these levels that gives signals to buy or sell. All figures are related to probabilities. They are one of the main tools of chartist analysis. More info here.
- Cluster: It is when a lot of indicators converge on the same level. For example, if you have chartist support + a Fibonacci level + a POC + a pivot point which are all at the same level, we will call this area a cluster.
- CME: Chicago Mercantile Exchange, it is a futures market, the largest in the world.
- Correction: This is a sharp and rapid reversal in the price of a cryptocurrency, which can be up or down. We speak of a correction, because following this, the price approaches its previous price, after a rather long period of rise or fall.
- Cold Storage: Designates the fact to hold and store private keys on an offline medium of the Internet. Private keys can be stored on a simple sheet of paper “Paper wallet ”, or even on electronic wallets such as the “Ledger Wallet” or the “Cool Wallet”.
- Consensus: This is the truth admitted by the participants in the system. This does not mean that the consensus is the absolute truth or that it is indisputable, but it is the reality on which the participants in the system agree. The strength of a blockchain is therefore to arrive each time, efficiently and in a decentralized manner, at a consensus: we speak of “consensus protocol” or “consensus mechanism”.
- Cross margin: Is a position management technique that uses all of your available capital on the platform to avoid liquidation. Any gain made on other positions can be used to add margin to a losing position using the cross margin. The most used remains the isolated margin .
- Cryptoactive: Since 2018, cryptocurrencies have been requalified by the AMF, which now prefers the term “cryptoactive”.
- Cryptocurrency: Is a digital currency based on the principles of cryptography. The exchanges take place on a decentralized network, in peer-to-peer, thanks to Distributed Ledger Technologies (DLT) technologies such as blockchain, DAG or block lattice . It integrates the user into the process of storing, issuing and settling transactions and eliminates the intervention of an intermediary or a trusted third party (eg a bank)
D
- DAO: “Decentralized Autonomous Organization” designates a system where the rules of governance are fully automated and do not, in principle, need any human intervention.
This organization is therefore based on the principle of “trustless”. This makes it possible to completely eliminate the notion of trust in a third party.
Within a DAO, it is therefore the code that makes the law (code is law). The operating rules are written into smart contracts within a blockchain, making them immutable and transparent.
- Day Trading: It consists of taking rather short trading positions, ranging from a few hours to a maximum of a few days. Day trading is often used in trend continuation strategies or in order to achieve chart patterns. These strategies are generally accompanied by the implementation of specific Take Profit and Stop Loss. This is a short term position.
- DCA (Dollar-Cost Averaging): This is an investment/trading technique aimed at reducing the average purchase cost. For example, buying 1 BTC at $ 10,000 and another BTC at $ 5,000 is like buying 2 BTC at $ 7,500. We also talk about average down.
- Decentralization: It allows you not to have a trusted third party and to be in control of your assets. It brings security and confidence. Technically, the network nodes of a blockchain allow transactions to be validated across the world.
- Decentralized Exchanges (DEX): They offer an alternative to large centralized exchange platforms, like Binance, to allow users to trade their cryptocurrencies on peer-to-peer markets directly on the blockchain. Traders thus remain custodians of their funds.
This makes it possible to do without a trusted third party in order to fully benefit from the advantages of decentralization. However, the use of these platforms can be less intuitive.
- Dead Cat Bounce: This is a small upward rally in the price of an asset before continuing to fall. Some investors get tricked into thinking this is a recovery. The slight upward retracement does not exceed 38.2% Fibonacci retracement when talking about a dead cat bounce.
- Dip, BTD, BTFD: Sudden, but often ephemeral, drop in the price of a cryptocurrency. This phenomenon is usually the result of a massive sale of the asset in question, or can be caused by chain liquidations.
The expressions, BTD for “Buy the dip”, or even BTFD “Buy the fucking dip”, are regularly used by the crypto community to support purchases during these market phases. A dip can be a very interesting entry point.
- Divergence: This is when the indicator does the inverse of the price: For example, the price makes a new LL while the indicator makes a HL.
- Dust: Corresponds to the small amounts of cryptocurrency remaining in your wallet and that you can neither sell nor convert, the amounts being too low. At Binance for example, it is however possible to convert its due into BNB (platform token) to recover them or pay transaction fees with.
- Dump: This is the generally prolonged drop in the price of a cryptocurrency.
E
- ERC-20: “Ethereum request for comment n ° 20″, is a standard smart contract that allows the creation of tokens based on the Ethereum blockchain, that is to say without having to develop a new blockchain. This is the major tool used by the organizers of ICOs that allows them to create a new currency by building on the efficiency and good reputation of the Ethereum blockchain.
- Exchange: Marketplace dedicated to cryptocurrencies. In addition, having the ability to sell and buy cryptocurrencies, exchanges provide you with a Wallet that allows you to store, transfer your coins, and receive them.
There are currently more than 300 cryptocurrency exchange platforms of varying size, secure, and specialized in certain currencies. The platforms are remunerated by levying transaction fees, which are generally low (almost always below 1%).
F
- Faucet: Is a site or part of a site where you can, by performing very simple actions such as clicking on a button, recover infinitesimal parts of cryptocurrencies.
- Fees: Transaction fees (not proportional to the sum) or trading fees generally paid on entering and exiting a position.
- Fiat: Means “let it be so” in Latin and designates a currency which is legal tender and imposed by the issuer, which can be a state or a group of states (in the case of the euro), such as the euro, the yen or the US dollar.
- FOMO: “Fear of Missing Out”, in financial markets, this refers to the fear of an investor or trader of missing out on a good deal, which will cause them to act impulsively to be sure they are on the bandwagon.
- Flippening: Refers to when the total capitalization of Ethereum (ETH) will exceed that of Bitcoin (BTC). This is a theory born following the soaring price of Ethereum (ETH) and the decrease in Bitcoin’s dominance. This phenomenon almost happened in June 2017. Ethereum’s capitalization was $ 37 billion and Bitcoin’s was $ 45 billion.
- FUD: Fear, uncertainty and doubt; In trading, we see it as setting up negative news for the market in order to scare investors and make them sell.
- Fundamental Analysis: Its purpose is to assess as accurately as possible the value of a company or a particular sector of activity. It is determined through the accounting, financial or even strategic study of the company.
- Funding: “Position keeping” fees, often every 4 hours.
- Positive funding: Longs have to pay to keep their positions open, shorts are remunerated. (Longs pay for shorts).
- Negative funding: The shorts must pay their position, the longs are remunerated. (shorts pay for longs).
- Future: This is a type of derivative contract, so you are trading an underlying. It is one of the most widely used financial instruments by individuals. It offers many advantages such as low spread and fees or the use of high leverage.
G
- Gap: It is when there is a step of quotation between 2 periods. There were no transactions on these prices. Gaps are very rare in cryptos because the markets are open 24 hours a day unlike regulated markets such as the stock market. The lack of liquidity can also explain the appearance of gaps.
- Gas : Some Smart Contract blockchains, like Ethereum or the Binance Smart Chain (BSC), need “financial fuel” to work. On these blockchains, gas (ETH or BNB tokens here) is used to pay transaction fees or execute the various operations provided for by a Smart Contract. When you use a blockchain, it is therefore essential to have gas from the network in question in order to be able to carry out actions there.
- Golden Zone / Golden Pocket Zone: It is an area that is between 2 Fibonacci retracement ratios: 61.8% and 65%. Very small area rather intended for scalpers.
H
- Harmonic Pattern (HP): Is a pattern on the chart respecting Fibonacci retracements and extensions. These figures allow entry into position in the PRZ once established.
There are several HP with animal names, the most famous of which are: Gartley, Butterfly, Bat, Crab, Deep Crab, Shark, 5-0, Cypher
The objective is to enter position with an interesting RR. TP levels are given in advance, they differ depending on the HP but generally it is a 38.2% retracement for TP1 and 61.8% for TP2.
- Hash: Is used in computing, but also in cryptography. The Hash is a fingerprint that aims to authenticate initial data, by comparing it to other fingerprints.
In cryptography, the fingerprint is the result of applying an encryption algorithm to a given message. Whatever the nature of the data processed by the encryption mechanism, the fingerprint will always have the same syntax, that is to say the same number and the same type of characters.
- Hash rate: The hash rate per unit of time. The unit of time used is H/s (hashes/second). In the case of bitcoin, we are at PH/s (1 million billion hashes per second).
- Hedge: Is an investment or an order intended to reduce your exposure to risk. There are several techniques such as opening a position in the opposite direction to cover part of the risk.
- High Frequency Trading (HFT): These are operations carried out on the financial markets by algorithms, they can last only a few microseconds. The goal is to make money at such a speed that market makers with an HFT algorithm can, among other things, analyze the orderbook and thus create winning strategies by playing on the spread.
- Higher High (HH): A high, higher than the previous one.
- Higher Low (HL): A low, higher than the previous one.
- Hodl: Means to hold, to maintain. For the record, the use of “hodl” would come from the fact that several years ago, a drunk person posted a message on BitcoinTalk to encourage investors not to panic and not to sell despite falling prices. : instead of writing “hold”, this one would have written “hodl”.
The term has since remained and continues to be used with each dump (or dip) of a cryptocurrency to prevent different investors from panicking.
- Hot Storage: (Opposed to “Cold Storage”) is the act of storing your private keys and other passwords on a connected device or even online. The desktop and exchange wallets are essentially the hot storage, while the hardware wallets and paper wallets are the storage cold.
I
- ICO: An “Initial Coin Offering” is a fundraising in cryptocurrency. During an ICO, a new cryptocurrency is created, and the public is invited to invest in this new token during the start-up phase of the associated project.
The investor therefore takes the risk of selling reference currencies (BTC, ETH, USDT, etc.) against an asset that does not yet exist, and of which he does not control the outcome of the project.
- Isolated Margin: Is the reverse of cross margin, only part of your bankroll is at risk.
K
- KYC: “Know Your Customer”, this term refers to all procedures that require you to send documents to prove your identity.
Some exchanges or ICOs for example, will often ask you to go through a KYC verification process, where you will need to send a selfie, ID and proof of residence.
These steps are aimed at combating money laundering. It is a legal obligation.
L
- Lambo: Investors use it to refer to their future car (aLamborghini) once their cryptocurrency wallet has enabled them to make a fortune. This is humor, since no cryptocurrency investor can be sure of seeing a price increase over the long term.
- Leverage: Allows you to increase the size of your position without fully exposing your capital. For example, on a $100 account, using 10x leverage, you can trade with $1,000. It thus increases the potential gain but also the potential loss. It is not recommended for beginners, especially in the crypto market which is sufficiently volatile. To be used as part of an adequate money-management.
- Leverage effect: It allows you to multiply your exposure to the market, while immobilizing only part of your capital, which is called hedging or collateral. The broker, often the exchange in our case, makes the remaining part of the total value of the position available. Gains and losses are calculated on the total value of the position. The leverage effect therefore makes it possible to multiply one’s earnings, but also exposes people to proportional risks of loss…
- Lightning Network: Is a Layer 2 (secondary layer) of the Bitcoin protocol. This solution aims to greatly improve the scalability of the Bitcoin network, thus making it possible to solve congestion problems during peaks of use.
To do this, the Lightning Network offers an overlay to the Bitcoin network, in order to pass certain off-chain transactions (outside the main chain), on a dedicated payment channel.
Only the opening and closing transactions of the payment channel will be recorded on the Bitcoin blockchain.
Thus, the Lightning Network greatly accelerates the speed of transactions, while significantly reducing the costs of exchanges.
- Limit: Is a type of stock market order also used in cryptocurrency markets where you agree to buy or sell an asset when it has reached a certain price that you specify. If you want to buy, the exchange will place the order when the asset has reached the price you specified on the downside. If you want to sell, it will do so when the asset has reached the price you specified on the upside.
- Liquidity: An important indicator of financial markets that describes the ability to buy or sell assets quickly in a given marketplace without having a major effect on prices. The more liquid a market is, the faster and easier you can transact in that market. Liquidity is an essential characteristic that a good market must provide. It depends in particular on the number of buyers and sellers, transaction costs and the terms of placing an order on this market.
- Liquidation: Takes place when a position is closed with the maximum deficit authorized by the broker for the position taken. Liquidation is undesirable and in principle the result of a bad trading strategy.
- Long: Being in a buy position, the reverse of Short. Here, we are betting that the price of the asset will increase.
- Lower High (LH): A high, lower than the previous one.
- Lower Low (LL): A low, lower than the previous one.
M
- MACD: “Moving Average Convergence Divergence”. This is a technical indicator for determining trend changes. MACD is the difference between two exponential moving averages of different time periods (usually 12 and 26 days). MACDs are useful when crossed with its signal line, to determine a buy or sell signal.
- Mainnet: Is the original network for transferring cryptocurrency from one address to another within the blockchain. The mainnet differs from the testnet, which aims to test the transfer function on a prototype network.
- Maker: Is a buy or sell order in the order book of a broker or a trading platform. The market makers are intermediaries such as brokers, who rate markets for investors and give off a margin (a spread) between the buying and selling prices to compensate. The proposed purchase price is therefore slightly higher than the market price, and the selling price slightly lower. By extension, we call a “maker” a person who places a buy or sell order on the order book at a price different from that of the current price. His order will therefore be executed deferred.
- Margin trading: Consists of borrowing money to benefit from leverage within the framework of its trading activities. Margin trading allows you to amplify your gains, but also has the effect of increasing your losses tenfold. It is therefore a practice that can be very risky.
- Market: Refers to a pair of assets on an exchange, for example BTC/USDT on Binance, i.e. all exchanges between Bitcoin and Tether on this platform. An exchange therefore offers as many markets as there are pairs that can be traded on the same platform. Whether it is one cryptocurrency and one fiat currency (eg BTC/USD) or two cryptocurrencies (eg ETH/BTC).
- Market Cap: Means the capitalization of the market. This is the value, usually expressed by default in USD, that a given cryptocurrency represents. The market cap is calculated by multiplying the number of tokens in circulation by the price of the currency. The Coin Market Cap site calculates it based on the weighted average price of the exchanges where cryptocurrencies are listed.
- Mining: It is a process allowing to solve an IT challenge determined by a consensus (generally the Proof of Work).
Computer computing power is usually used to process transactions and secure the network.
Mining is remunerated by the distribution of newly issued coins and by the costs generated.
- Miner: Miners connect one or more machines to a network to perform mining.
Each miner is paid according to the pro rata of the computing power that he brings to the network (when he is in a pool).
- Minting/Forging: It is a process to solve an IT challenge determined by the consensus of Proof of Stake (PoS).
As for mining, computing power is used to process transactions or secure the network. This operation generally follows the same remuneration process as mining.
- Moon: A term used to define an infinite pump with the expression “To the moon”.
- Moving Average: A great classic of trading. They are calculated taking into account the previous closing prices. MAs allow a simple reading of a chart to determine a trend.
N
- Naked POC: A one-session POC that has never been retested.
- Nodes: Participants in a peer-to-peer network that perform certain unpaid functions of backing up, validating, verifying or transferring data, if they do not engage in mining (PoW) or minting (PoS). The number and availability of nodes are important factors in the quality and reliability of a decentralized network.
O
- OCO: For “One Cancels the Other”. Order type that allows you to place two orders at the same time. It combines a limit order with a stop-limit order, except that only one of the two can be executed. Very handy when you are in a position to define a TP and an SL being sure that only one of them will be triggered.
- OI (Open Interest): Total number of outstanding derivative contracts that have not been settled. For every buyer of a futures contract, there must be a seller. From the moment the buyer or seller opens the contract until the counterparty closes it, that contract is considered “open”. In short, it’s real money instantly in position (not closed).
- Option: A derivative product that establishes a contract between a buyer and a seller. The buyer of the option obtains the right, not the obligation, to buy (call) or sell (put) an underlying asset at a price fixed in advance. The investor loses everything he has put into play if he loses his bet.
- Order Book: List of buy or sell orders in a market, which can be observed for each cryptocurrency on an exchange platform. The order book is updated in real time throughout the day and can provide information on other traders’ expectations of market movements.
P
- Panic Sell: Consists of selling a cryptocurrency in a hurry for fear that the price will collapse. This often happens in the cryptocurrency market as soon as bad news is announced, or the drop in price accelerates sharply.
- Peer to Peer: Is a network without a central body or server, where each computer can play the role of client or server, i.e. it can offer all the services of a central server, namely the storing and processing data, assigning tasks, communicating information and data, and being a client of the network itself, that is, issuing requests.
- PnL or P&L: From profit and loss, represents all the open positions with the profits and losses incurred at the moment.
- PRZ: Potential Reversal Zone. This is a Fibonacci level confluence area when tracing a Harmonic Pattern to determine point D.
- Public address / Private key: The public/private key pair is fundamental in asymmetric cryptography and materializes in cryptocurrencies in the form of public address / private key. The public address is like an IBAN, it is used to receive coins and is specific to a given cryptocurrency. It can be distributed to the whole world because it is theoretically impossible to determine its private key. The private key gives us control of a public address and therefore of the funds attached to it. It is very easy to generate public addresses from private keys, but the reverse is impossible, it is the principle of asymmetric cryptography.
- Pump: (opposite of the dump) Sudden, sustained rise in the price of an asset. A pump remains a rather violent movement in a market, and often generates other mechanisms by snowball effect.
- Pullback: When the price corrects its trend to retest its support or resistance, an interesting area to enter a position if we think that the trend can continue.
- POC: The Point Of Control is drawn thanks to the volume profile (available with a paid version of trading view), it is represented by a purple line and represents the price level where there was the most volume carried out. It is said to act as a magnet in the market, often tested so it can act as support / resistance.
- Pool Mining: This is a mining process in which miners come together to mine together.
The remuneration is then shared equitably between the minors according to the share of contribution of each.
Overall, this process makes it possible to have much more frequent and regular remuneration, but at a lower amount.
- Price Discovery: On price discovery, we do an ATH.
R
- Range: The price is not trending (bullish or bearish) but stagnates between 2 limits.
- Reload Zone (RLZ) / OTE (Optimal Trade Entry): Price zone allowing entry into a position with a very interesting RR due to its large retracement. Indeed, the area between 61.8% and 78.6% Fibonacci retracement is an interesting area to enter a position and limit your risk.
- Retail: We speak of a “retail trader” to designate a particular trader. These are to be differentiated from institutional traders who work in companies (Hedge Funds, Bank etc…) and have financial capacity and knowledge superior to retail.
- Resistance: Support and resistance levels are fundamentals of technical analysis in trading. A resistance is a threshold from which bearish movements slow down the rise in prices: we therefore observe a certain level, that the price of a cryptocurrency never seems or very rarely exceeds. This threshold can be seen as an interesting sell signal. Very often, once reached, it therefore leads to a bearish correction. The difficulty remains knowing how to correctly identify a level of resistance.
- ROI: “Return on Investment”, it gives a very important indication of the profitability of an investment (or a trade). It is calculated by making the ratio of the profit obtained on the amount invested.
Cryptocurrencies purchased through an ICO can have an excellent ROI when the back-to-back project is supported.
- RR (Risk / Reward): Calculation that reflects how much you are willing to risk compared to what you expect to earn. Traders wishing to survive in the market should look for trading strategies where the theoretical gains will be greater than the potential losses per trade.
The higher the gains compared to the losses, the more the trader will be able to overcome the losses and stay positive. It is about putting the odds on his side statistically.
Thus, it is obvious to enter trades with an RR greater than 1, it is generally best to enter a position with an RR greater than or equal to 2. This will depend on the profile of each trader.
- RSI: Relative Strength Index. One of the indicators most used by traders, it reflects the relative strength of bullish movements compared to bearish ones. It is a trend indicator, it is standardized in a range from 0 to 100 where there is a so-called oversold zone (between 0 and 30) and an overbought zone (70 to 100) particularly useful for finding divergences.
S
- Satoshi: Where again the mysterious inventor of Bitcoin, is a unit of account that represents one hundred millionth of Bitcoin, or very little money. It is the smallest fraction of a bitcoin.
- Scalping: A scalper is a trader who holds a scalp position, that is, a position of a few seconds to a few minutes. Considering the high volatility of the crypto markets, this type of trading is very complex. The goal will be to carry out many transactions, while maintaining a positive success ratio. This is a very short term position.
- Scam: Cryptocurrency which is purely a scam. We also talk about “Exit Scam” when a crypto platform closes overnight, with all the cryptocurrencies of its users.
- Shitcoin: Cryptocurrency with no viable project, no serious technical basis and therefore no intrinsic value. This type of coin is often used for speculating in order to profit from the volatility of a price. It is therefore very important to learn precisely about each project before obtaining tokens.
- Short: Being in a sell position, the reverse of Long. It is not a question of taking profits on its purchase, but of making the bet that the asset will lose in value.
- Sidechain: Secondary blockchain attached to a main blockchain. This type of architecture makes it possible to segment information in order to increase the amount of information processed while making communication possible between the main chain and the secondary chains. This operating method is also positioned as a response to the scalability problems encountered by first and second generation blockchains. They must now find solutions to increase their transaction speed per second.
- SL: “Stop Loss”, Price where a trade is cut, usually at a loss, so as not to lose more, taking losses is important and part of trading. There are several types of orders to cut losses such as Stop Limit and Stop Market.
- Slippage: Spread between the price level where your order is placed and where it is actually executed for various reasons such as market liquidity which creates a market gap or even because of a violent and rapid movement.
- Smart Contract: IT protocol of the type “if this happens, then it happens and vice versa”. A smart contract can be executed automatically by digital tools, provided that these can draw the data necessary for the operation of the contract. Digital tools make it possible to check at time T whether the conditions of the contract are being respected and whether the time has come for a particular event to occur.
- Solo Mining: It is a mining process where the miner submits his hashes directly to the network and is paid this time alone.
This process will result in much less frequent, if not nearly impossible, remuneration for a particular minor. But this would theoretically be much more important if the miner succeeds in solving the calculation before the others.
- Speculative Bubble: We speak of a bubble, when the price of a security, or even of an entire sector, makes an disproportionate increase. This increase is decorrelated from the real growth of the market. The formation of a bubble is usually triggered by an excess of optimistic speculation about the growth of valuations. It can take several weeks, months, or even years, before the bubble explodes, and then violently pulls the price down. We speak more commonly of a “crash”.
- Spoofing: Attempt to manipulate the market, which consists of issuing false orders, and their almost immediate withdrawal via trading algorithms. Note that market manipulation is a frequent phenomenon in the crypto market.
- Spot: This price is set for immediate delivery in a spot market, as opposed to the futures market. The spot market provides the investor with price stability and is therefore less risky than the futures market.
- Spread: The spread is the difference between the buy price (Ask) and the sell price (Bid). The larger it is, the more illiquid the market is considered.
- Stochastic: Indicator similar to the RSI, it measures the relative position of the course. It is narrow-minded, has an oversold (<20) and overbought (> 80) zone. It is also possible to find discrepancies.
- Stop Limit: Type of order made up of 2 entries, the stop price and the limit price. The stop price is used to trigger, at the indicated price, the limit order which will be placed in the orderbook.
- Stop Market: Order that will be triggered as soon as the indicated price is reached.
- Support: Threshold from which bullish movements slow down the fall in prices. It is the opposite of resistance. The support may correspond to the end of a bearish period and announce the upward recovery of a price. Support is an attractive entry point for buyers. In the cryptocurrency market, supports are more difficult to determine than in stable markets, as stocks are much more volatile and frequently break their support and resistance levels.
- Swing: A swing is a position held over several days to several weeks. By keeping your positions open for longer, throughout a technical movement. This type of trading generally achieves better performance than shorter-term positions. However, risk exposure is also higher, which requires good risk management. This is a medium term position.
T
- Taker: Trader or investor who buys at market price. His order to buy or sell will therefore be executed immediately. The taker reads the order book and buys or sells at the most satisfactory price at the time. The takers are buying and selling at the market price, while the makers act on market prices by setting sales or purchase price upwards or downwards.
- Technical Analysis (TA): The study of the price charts of an asset, using various indicators deduced from the prices in order to forecast the evolution of the markets.
- To the Moon: Expression very frequently used by crypto communities. It refers to enthusiasm for a cryptocurrency, the value of which its investors see growing “to the moon”. The expression often comes up in bullish times or when a currency is pumping.
- TP: Take Profit means taking partial or total profit on a trading position. There are several types of order to take profits like Stop Limit, Stop Market & Trailing Stop.
- TPO: Time Price Opportunity. Price level where we spent the most time.
- Trailing Stop: Order type that automatically shift its stop depending on market movement.
- Trend: Can be bullish (Uptrend/Bull trend) or bearish (Downtrend/Bear trend).
- TV: TradingView, the site generally used for technical analysis.
U
- Utility Token: Is a type of cryptocurrency dedicated to uses within a crypto platform, or allowing access to certain services.
The value of a Utility Token is generally correlated with the performance of the associated platform (for example: number of users, volume, features).
V
- Volatility: Represents the changes in the price of a currency (or another security) over a defined period. The higher it is, the more it is considered that the security is risky, because its value can drop significantly in a short period of time. Volatility is very important in the cryptocurrency market, which makes it a risky market, but also very profitable for good traders.
- Volume Profile: Paid indicator on TradingView, allows to display the significant levels of volume via a histogram according to the price and not according to time as the basic volume indicator does.
We distinguish the POC, the Value Area (VA) in dark which represents 70% of the volumes of transactions carried out, the VA High (VaH) and the VA Low (VaL) which represents the upper and lower limit of the VA.
- Vegas: Trend following indicator. It is made up of Exponential Moving Averages (EMA) to form a cloud. EMA 144 and 233 form this cloud., EMA 169 serves as an intermediate level in this cloud.
- Vwap: Volume Weighted Average Price. It is an indicator that gives excellent levels for intraday trading. It is valid for one session and will be reset for the following day. Quite popular with institutions and trading algorithms.
W
- Wall: Large order or several orders standing out clearly from the rest therefore taking the form of a wall within the orderbook. Be careful not to want at all costs to analyze this kind of phenomenon very often resulting from an attempt to manipulate the market.
- Wallet: It is an application that allows you to “store” cryptocurrencies. A wallet offers several functions: display the crypto balance, generate public addresses and private keys, send and receive crypto …
There are several types of wallets: hardware, desktop, web, mobile, or even those of exchanges.
- Whale: An investor with significant weight in a market.
- Whitepaper: It defines its technological bases, explains its consensus mechanism (algorithms, rewards) and possibly presents a business model and a business plan if the cryptocurrency is a token.
The study of the whitepaper allows to learn more about each project, its team, and to form a personal opinion on its viability before investing. This is one of the best sources of information possible to learn about a crypto project.
