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The Ultimate Cryptocurrency Glossary

cryptocurrency glossary

Hd Wallet Seed

The leveraged assets are not owned by the firm or individual borrowing it. Indices are hypothetical portfolios that track a sector of the traditional cryptocurrency glossary stock market. While tradable with derivative products or index mutual funds, indices are not assets that one can actually own.

  • Since most individual miners don’t have the computing power or the hardware to dedicate one or more machines strictly to mining, they’ll join with other miners to distribute the processing burden.
  • When more than one miner is involved in the processing of data blocks, this is called a mining pool.
  • There’s really no one owner of Bitcoin, and no corporate board making the decisions; all of its investors have a vested interest and a share in it.
  • Once the mining is completed and verified, the pool’s members divide the coin and transaction fee rewards evenly.
  • As such, when we use the term “issuer,” we mean the investors in a type of cryptocurrency; we use it conceptually and not literally.
  • There’s no central bank, no government deciding when new cryptocurrency comes into being; it’s “minted” when investors mine the data blocks.

Public Or Private Key

Breakouts are used by some traders to signal a buying or selling opportunity. Bollinger Bands® is a technical analysis tool cryptocurrency glossary defined by a set of lines plotting two standard deviations away from a simple moving average of the traded assets price.

cryptocurrency glossary

The opposite of a “High Volume Node”, these are areas of the volume profile with low amounts of volume representing inefficiencies in the market. A lot is a fixed quantity of units of an asset that are purchasable all at once. A long hedge is a trading position in which you countertrade your own short position in the same or correlated asset/currency in order to reduce risk. Liquid markets are cryptocurrency glossary markets with large amounts of trading activity, volume, and/or market participants. The more liquid a market, the more it is able to absorb large amounts of buying and selling without large market movements. Leverage involves borrowing a certain amount of the money needed to invest in something such as a leveraged trade. The assets or currency is borrowed against the accounts margin balance.

Higher transaction fees can be set to incentivize miners to prioritize including a specific transaction in a block. The concept of translating business strategies, goods, or services into discrete, tradeable units that are recorded on a blockchain or other system. A cryptocurrency that is used in conjunction with aDAppto perform actions is an example of a utility token. A cryptocurrency that has a use case beyond simply transferring value between actors.

Bollinger Bands® were developed and copyrighted by famous technical trader John Bollinger. A blue sky breakout refers to the new high price territory that an asset trades up into as it clears at least three months of prior price highs.

Momentum trading is a technique in which traders buy and sell according to the strength of recent price trends. Price momentum is similar to momentum in physics, where mass multiplied by velocity determines the likelihood that an object will continue on its path.

Unspent Transaction Output (utxo)

The win/loss ratio is the ratio of the total number of winning trades to the total number of losing trades. It does not take into account how much was won or lost, but simply if they were winners or losers. The win/loss ratio is used mostly by day traders to assess their daily wins and losses from trading. It is used with the win-rate, that is, the number of trades won out of total trades, to determine the probability of a trader’s success. A win/loss ratio above 1.0 or a win-rate above 50% is usually favorable. The win/loss ratio is also used by systems traders developing a new strategy to determine whether or not that system will be profitable over a long period of time. This is accomplished through rigorous backtesting of a given system.

A blow-off top is a chart pattern showing a steep and rapid increase in price and trading volume followed by a similarly steep and rapid drop in price. A bid is an offer made by an investor, trader, or dealer in an effort to buy a security, commodity, or currency. It is also the price at which Market Sell orders will be filled. A bear trap fools a bearish investor expecting to profit from the dropping prices of a given asset. A bear trap is a false impression that the prices are dropping causing a bearish investor to try to take advantage of that. The price then reverses, going back up, usually resulting in an unprofitable trade.

Candlesticks or Candles are defined as a representation on a chart used to show changes in price over time. A traditional candle provides 4 points of information, the opening price, the closing price, the high, and the low. Other forms of candlesticks are Heiken Ashi and Renko which use different variables to determine the candle. A buy wall is an order block composed of a large enough amount of limit order bids such that price is unable to continue depreciating. Bull market is a prolonged upward trend of a traded asset class. A breakout is the movement of the price of an asset through an identified level of support or resistance.

cryptocurrency glossary

Major Cryptocurrency Terms

A swap is a type of derivative contract in which one party exchanges the values or cash flows of one asset for another. Swaps tend to be customized contracts that are traded between institutions, with individuals rarely if ever owning or participating in swaps. Support is an area cryptocurrency glossary of the market that price has difficulty falling below. Areas of price that have acted as support, once broken, can act as resistance in the future. A trading strategy is the method of buying and selling in markets that is based on predefined rules used to make trading decisions.

Prepare for the transformational impact of blockchain, from fully traceable supply chains to immutable identity management, with our portfolio of fully connected, smart blockchain solutions. Ethereum’s virtual machine implements a version of WASM that provides additional cryptocurrency glossary functionality for blockchains, known as eWASM. Multipleactors may share a multisignature wallet, but they may not all have to participate in each transaction. Transaction pools may vary from node to node based on which transactions they have been made aware of.

The Ultimate Cryptocurrency Glossary

A “bear market” is a prolonged downward trend of a traded asset class. The ask or asking price is the price at which an asset is offered by the seller. An accredited investor is an individual or business entity with special status under financial regulatory laws. The cryptocurrency glossary definition of an accredited investor, and the consequences of being classified as such, vary between countries. Sometimes this class of investor is called a Sophisticated Investor. Discover new horizons only reachable through the intersection of blockchain and AI.

The date at which the put option expires is called the expiration date. If the option is not executed before the expiration date it will expire worthless. A pullback is a pause or moderate drop in an asset’s price from recent peaks that occur within a continuing uptrend.

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