The beginning of the way to learn cryptocurrency trading is to understand the most important terms used in this field.
Are you thinking of learning to trade cryptocurrency from scratch but don't know where or how to start? Through the "Riyadah" page, we will try to provide a set of reports that explain to you how you can begin to understand cryptocurrencies.
Cryptocurrencies are starting to generate a lot of interest as an alternative investment. And a large part of this is due to the headlines generated by the huge jumps in the value of Bitcoin. The price of Bitcoin started in 2017 with a value of about a thousand dollars, and rose to more than 19 thousand dollars by December of the same year. In 2021, it reached its highest historical level at levels of $68,000 in November, and then began to decline in 2022 and reached nearly $19,000 at the time of this article's update.
The new asset space gained more credibility when global US platforms such as CoinBase were listed on NASDAQ and several international exchanges allowed cryptocurrency to be traded via Bitcoin futures.
There is a lot to learn if you want to invest in these digital assets, but first you must be fully aware that they are classified as high risk investments, as you can easily lose huge amounts of money in moments if you are not aware of what you are doing and you are not familiar with the mechanism of trading.
The beginning of the learning path is to be aware of the most important terms used in this field. Forbes, an American business and financial affairs website, has published; In a report by the writers Mark Heusen and Farren Powell, they mentioned part of the most important of these terms:
Bull market : It refers to a market in which cryptocurrency prices generally move upwards for a certain period of time.
Whale: A term used to describe very wealthy investors or traders who have enough money to manipulate the market
“bear market” refers to a market in which cryptocurrency prices are generally in a downtrend.
“Altcoin”: Any cryptocurrency other than Bitcoin.
ATH: The highest price level reached by the cryptocurrency.
ATL: The lowest price level reached by the cryptocurrency.
“LAMB” or “LAMBO” is the term used for the Guinean lampur, indicating the speed at which one expects to become wealthy, given current market conditions. It is also often used to indicate the opposite; Which is that someone loses a lot of money during recessions.
Whale: A term used to describe very wealthy investors or traders who have enough money to manipulate the market.
Rugpull : This refers to a fictitious cryptocurrency strategy, in which crypto developers abandon the project and run away with investors' money.
“Arbitrage”: It refers to buying from one exchange and then selling to another if the margin between them is profitable, as multiple exchanges trade the same cryptocurrency on any link, and they can do so at different prices.
To the Moon: Investors use the term or rocket emoji when they think the cryptocurrency is going to boom.
Mining: One of the first concepts that comes to mind when mentioning Bitcoin terminology is mining, which is the process of creating new digital currencies by solving complex mathematical problems that are then validated and added to the shared database network.
Pizza: One of the first bitcoin transactions that ever happened, in 2010 a programmer paid one bitcoin (worth about $40 at the time) for two pizzas.
The official website of the American Nasdaq Stock Exchange has published an article on the importance of knowing the terminology used in cryptocurrency trading, the most important of which is the following:
Buy the dip: Refers to the idea of buying cryptocurrencies when prices fall to reap benefits when they rise again.
DeFi stands for Decentralized Finance: Refers to the growing ecosystem of applications and services that leverage blockchain technology and cryptocurrencies to provide decentralized financial services to users.
Stablecoin: A type of cryptocurrency that seeks to maintain price stability
CeFi Central Finance: Offers new crypto-focused loan and savings products, but within a traditional centralized framework, where users create accounts, provide credentials, and access customer service.
TA Fundamental analysis: A method for evaluating an asset as well as predicting its future performance.
Memecoin: An alternative currency based on mockery, a kind of prank in the form of an image that has been frequently modified and shared online. An example is Dogecoin.
P2P Peer-to-Peer: A term referring to a transaction between two people without the intervention of an intermediary or a central authority.
Proof of Stake (PoS): Other Proof of Work alternative includes; Reward for “crypto” miners; To provide their computing power to the network in exchange for this miner’s investment in the cryptocurrency. So if a miner has 3 tokens, he can only earn 3 tokens.
Airdrop: An event where a blockchain project distributes free tokens or cryptocurrencies to the community.
Dumping: The act of dumping large amounts of cryptocurrency simultaneously on exchanges which causes prices to fall due to more supply than demand for cryptocurrency.
ICO: Initial Coin Offering: The first proposal for the public purchase and sale of tokens or digital assets for the emerging blockchain project.
IDO First Decentralized Offering: Similar to ICO but allows users to interact with the project before it is released.
IEO Initial Exchange Offering: This is the first time a cryptocurrency has been sold through a cryptocurrency exchange.
The Next Adviser website also published a report on the most important of these interests necessary to understand the cryptocurrency trading market, the most important of which are the following:
LAMBO: The term we referred to earlier, used as an abbreviation for the Guinean Lampur, indicates the speed at which one expects to become rich, given the current market conditions. It is also often used, to indicate the opposite, as we said earlier.
Whale: It was previously mentioned that it is a term used to describe extremely wealthy investors or traders who have enough money to manipulate the market, and it was also mentioned earlier.
“Pull the rug” or “Rugpull”: As mentioned earlier, it refers to a fake cryptocurrency strategy, in which crypto developers abandon the project and run away with the investors' money.
“Arbitraj”: As mentioned earlier, it refers to buying from one exchange and then selling to another if the margin between them is profitable, as multiple exchanges trade the same cryptocurrency on any link, and they can do so at different prices.
To the Moon: Investors use the term or rocket emoji when they think the cryptocurrency is going to boom.
51% attack: A majority attack that occurs when more than half of the computing power in a network is powered by a single person or group of people. The organization has complete control over the network and can negatively affect the cryptocurrency by stopping mining (crypto) or modifying operations and reusing cryptocurrencies.
Bear Trap: Created by people who aim to manipulate the price of any cryptocurrency; Everyone is selling the cryptocurrency at the same time, which indicates that the market trend is down.
Burn: The act of sending cryptocurrency to a wallet address that cannot be accessed again.
Hard Fork: A fork in the shared database (Blockchain) that validates transactions that were previously classified as invalid and vice versa. All nodes in the network must be upgraded to the latest protocol for this fork to work.
'Pump': This term is often used to refer to an upward price movement led by whales who have invested large amounts of money in cryptocurrency.
Pump and Dump: The abhorrent practice of buying a lot of cryptocurrency and then selling it at a high price to increase its price and encourage others to invest.
Sharding: A method for shredding the entire shared database record, so that every full node does not need an exact copy.
A “stablecoin” is a type of cryptocurrency that seeks to maintain price stability and is backed by a reserve asset such as the dollar or gold.
Proof of Burn (PoB): A type of consensus algorithm that requires users to "copy" or exchange some tokens by sending them to a non-spendable address, thus proving that they are real and active participants in the network.
BTFD Buy from the bottom: Often used by Bitcoin investors who see a price drop as temporary, and a good opportunity to increase their profits in the long run.
“Halving” is the process of halving the Bitcoin mining reward after approximately 210,000 blocks have been mined; This process takes about 4 years.
“Satoshi”: One of the more curious terms for Bitcoin is Satoshi, a numerical equation equal to 0.0001 Bitcoin, named after Satoshi Nakamoto, the founder of Bitcoin.
Hash RATE: This is a unit of processing power that tells you how many network-specific calculations are performed per second by the Bitcoin network. A hash rate of 1 tera means the network can perform a trillion calculations in one second.
Source : websites
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