Crypto Glossary: 60+ Trading Terms Every Trader Should Know
New to crypto trading and drowning in jargon? Or maybe you've been trading for a while but still encounter terms you're not sure about. This glossary covers 60+ of the most important crypto and trading terms — explained clearly, without fluff.
An instruction to buy or sell a crypto asset immediately at the best available price. Execution is guaranteed, but the exact price is not — during volatile conditions, you may get a slightly different price than expected (called slippage).
You want to buy BTC right now and don't care about getting the exact price — you place a market order.
Limit Order
An instruction to buy or sell only at a specific price or better. The order sits in the order book until the market reaches your target. You get price certainty, but execution is not guaranteed — the price may never reach your level.
BTC is trading at $85,000. You place a limit buy at $82,000. The order only fills if BTC drops to $82,000.
Stop-Loss (SL)
A pre-set order that automatically closes your trade at a specified loss level to protect your capital. If the market moves against you and hits your stop-loss, the position is closed. Setting a stop-loss is one of the most important habits a trader can develop. Read more in our guide on risk-reward ratio.
You buy ETH at $2,000 and set a stop-loss at $1,900. If ETH falls to $1,900, your position closes automatically — limiting your loss to $100.
Take-Profit (TP)
A pre-set order that automatically closes your trade when it reaches a profit target. Works like a stop-loss in reverse — when your target is hit, the exchange exits your position and locks in the gain.
You buy SOL at $100 and set a take-profit at $125. When SOL reaches $125, the trade closes and you bank the 25% gain.
Stop-Market Order
A combination of a stop and a market order. When price reaches your stop level, a market order is triggered immediately. This guarantees you exit the trade but not the exact price — in fast-moving markets there can be slippage.
Slippage
The difference between the price you expected and the price you actually got on an order. Slippage happens when there isn't enough liquidity at your target price, forcing the order to fill at slightly worse levels. Most common with market orders during volatile conditions or on low-liquidity assets.
OCO (One-Cancels-the-Other)
A pair of orders where if one executes, the other is automatically cancelled. Commonly used to set both a take-profit and a stop-loss simultaneously — whichever triggers first cancels the remaining order.
Bid / Ask Price
The bid is the highest price a buyer is willing to pay. The ask is the lowest price a seller is willing to accept. The difference between them is the spread — a cost you implicitly pay when entering and exiting trades.
02 — Position & Leverage
Long
A trade that profits when the price goes up. Going long means you buy an asset expecting its price to rise. The most common type of trade — buying BTC hoping it goes from $80k to $100k is a long trade.
Short
A trade that profits when the price goes down. Shorting involves borrowing an asset, selling it at the current price, and buying it back cheaper later to return it — keeping the difference as profit. Shorting requires a futures or margin account.
BTC is at $90,000. You short it. BTC drops to $75,000. You close your short and profit from the $15,000 drop.
Leverage
Borrowing capital from an exchange to increase your position size beyond what your balance would allow. 10x leverage means a $1,000 account controls a $10,000 position. Profits and losses are both multiplied by the leverage used. Leverage is powerful but dangerous — a 10% move against a 10x position wipes your entire margin. Read our full guide on leverage in crypto trading.
Margin
The collateral you deposit with an exchange to open and maintain a leveraged position. Your margin is what's at risk — if the trade goes against you far enough, the exchange liquidates your margin to cover the losses.
Isolated Margin
A margin mode where only the margin assigned to a specific trade is at risk. If that trade is liquidated, only the isolated margin is lost — the rest of your account balance is safe.
Cross Margin
A margin mode where your entire account balance is used as collateral for open positions. This reduces the chance of liquidation but means a bad trade can affect your entire balance, not just the allocated margin.
Liquidation
When an exchange forcefully closes your leveraged position because your margin can no longer cover your losses. Your margin is wiped. Liquidations are one of the fastest ways to lose capital — always use a stop-loss before the liquidation price is reached.
Liquidation Price
The exact price at which your exchange will liquidate your position. Calculated based on your leverage, entry price, and margin. You should never let price approach your liquidation level — your stop-loss should be placed well above it (for shorts) or below it (for longs).
Funding Rate
A periodic payment exchanged between long and short traders in perpetual futures contracts. When funding is positive, longs pay shorts. When negative, shorts pay longs. Funding rates reflect market sentiment — high positive funding means the market is overly bullish and can precede corrections.
Open Interest (OI)
The total number of outstanding futures contracts that have not been settled. Rising open interest with rising price suggests new money entering longs. Rising OI with falling price suggests new money entering shorts. Used by traders to gauge commitment and potential squeeze scenarios.
03 — Risk Management
Why risk management is everything: You can have a 40% win rate and still be consistently profitable — if your winners are significantly larger than your losers. The terms in this section are the foundations of professional trading. Master them before focusing on anything else.
Risk-Reward Ratio (RR)
A measure of how much you stand to gain relative to how much you risk on a trade. A 1:3 risk-reward means you risk $1 to potentially make $3. Professional traders typically look for at least 1:2 before entering a trade. Read our full guide on risk-reward ratio in crypto trading.
R-Multiple
A standardised way of measuring trade outcomes relative to initial risk. If you risk $100 (1R) and make $300, the trade is +3R. If you lose $100, it's -1R. R-multiples let you compare trade performance regardless of position size. A trader with a 40% win rate can be highly profitable if their average winner is +3R and average loser is -1R.
Position Sizing
The process of calculating how much of your capital to allocate to a single trade based on your risk tolerance and stop-loss distance. Most professional traders risk 1–2% of their account per trade — meaning if their stop is hit, they lose at most 1–2% of total capital regardless of position size.
Drawdown
The peak-to-trough decline in your account balance over a period. A 20% drawdown means your account fell 20% from its highest point before recovering. Managing drawdown is critical — recovering from a 50% loss requires a 100% gain to break even.
Win Rate
The percentage of trades that are profitable. A 50% win rate means half your trades win, half lose. Win rate alone tells you very little — it must be evaluated alongside your average R-multiple. A 30% win rate with +5R winners is more profitable than a 70% win rate with +0.5R winners.
04 — Technical Analysis
Support
A price level where buying pressure historically overcomes selling pressure, causing the price to bounce upward. Think of it as a floor. The more times price has bounced from a level, the stronger the support.
Resistance
A price level where selling pressure historically overcomes buying pressure, causing the price to reverse downward. Think of it as a ceiling. When resistance is broken, it often becomes new support (and vice versa).
Candlestick
A chart element showing the open, high, low, and close of an asset within a specific time period. The body shows the range between open and close; the wicks show the high and low. Candlestick patterns are used to identify potential reversals and continuations.
Higher High / Higher Low (HH/HL)
The structure of an uptrend — each price peak is higher than the last, and each pullback low is also higher than the previous low. When this structure breaks (price makes a lower high), it signals potential trend reversal.
Lower High / Lower Low (LH/LL)
The structure of a downtrend — each peak is lower than the last, and each trough is also lower. Used to confirm a bearish trend is intact.
Breakout
When price moves decisively beyond a key support or resistance level, often with increased volume. Breakouts can signal the start of a new trend. Many false breakouts (fakeouts) occur, which is why traders often wait for a confirmed retest before entering.
Retest
After a breakout, price often returns to the broken level to test it from the other side before continuing in the breakout direction. A retest of a broken resistance level (now support) is considered a high-probability entry point by many traders.
Volume
The total amount of an asset traded over a given period. Volume confirms price moves — a breakout on high volume is more credible than a breakout on low volume. Divergence between price and volume is often an early warning signal.
RSI (Relative Strength Index)
A momentum indicator measuring the speed and magnitude of recent price changes on a scale of 0–100. Above 70 is traditionally considered overbought; below 30 is oversold. In strong trends, RSI can remain overbought or oversold for extended periods — context matters more than the raw number.
Moving Average (MA / EMA)
A line that smooths out price data over a defined period to identify the trend direction. A Simple Moving Average (SMA) weights all periods equally. An Exponential Moving Average (EMA) gives more weight to recent prices. Commonly watched EMAs: 20, 50, 200. Price above the 200 EMA is generally considered bullish.
Divergence
When price and an indicator move in opposite directions. Bullish divergence: price makes a lower low but RSI makes a higher low — suggesting weakening selling pressure. Bearish divergence: price makes a higher high but RSI makes a lower high — suggesting weakening buying pressure.
Timeframe (TF)
The period each candlestick represents on a chart — 1 minute, 15 minutes, 1 hour, 4 hours, daily, weekly. Higher timeframes (daily, weekly) reflect the broader trend; lower timeframes (1H, 15m) are used for precise entry timing. Professional traders typically analyse top-down: start high (weekly/daily) to understand the trend, then drop lower for entries.
05 — Market Structure & Crypto Markets
Bull Market
A sustained period of rising prices and positive market sentiment. In crypto, bull markets are characterised by new all-time highs, rising altcoin performance, and increasing retail participation. Historically driven by Bitcoin halving cycles.
Bear Market
A sustained period of declining prices and negative sentiment. In crypto, bear markets typically see Bitcoin fall 70–85% from all-time highs, with altcoins often dropping far more. Bear markets shake out weak hands but create some of the best long-term buying opportunities.
ATH / ATL
All-Time High — the highest price an asset has ever traded at. All-Time Low — the lowest price ever recorded. ATH levels often act as resistance (traders who bought at the top selling to break even) before being broken in strong bull markets.
Correction
A temporary price decline within an uptrend, typically 10–30%. Corrections are normal and healthy — they shake out over-leveraged traders and create new buying opportunities. The key distinction from a reversal: in a correction, the overall uptrend remains intact.
Consolidation
A period where price moves sideways within a defined range, neither making significant new highs nor lows. Consolidation often precedes a breakout in either direction and can be an opportunity to accumulate positions at key support levels.
Liquidity
In markets, liquidity refers to how easily an asset can be bought or sold without significantly affecting the price. High-liquidity assets (BTC, ETH) can absorb large orders with minimal price impact. In trading, "liquidity" also refers to pools of stop-loss orders that institutional players target to fuel large moves.
Whale
An individual or entity holding a large enough amount of crypto to influence market prices. Bitcoin whales typically hold 1,000+ BTC. On-chain analytics tools let you track whale movements, which can signal upcoming price action.
Market Cap
The total market value of a cryptocurrency, calculated as current price × circulating supply. Bitcoin's market cap is used as a proxy for the health of the overall crypto market. Large-cap coins (>$10B) are generally less volatile than small-cap coins (<$500M).
BTC Dominance
Bitcoin's percentage share of the total crypto market cap. When BTC dominance rises, Bitcoin is outperforming altcoins. When dominance falls, capital is rotating into altcoins — often called "altcoin season." Traders watch dominance as a timing signal for when to shift between BTC and altcoin exposure.
Altcoin Season
A period when altcoins broadly outperform Bitcoin. Historically occurs after Bitcoin has made new highs and profits rotate into smaller assets chasing larger gains. Not all altcoins benefit equally — sector rotation (DeFi, AI, gaming) plays a major role.
06 — Blockchain & Crypto Basics
Blockchain
A decentralised, immutable ledger that records every transaction across a distributed network of computers. No single entity controls it. Once data is written to the blockchain, it cannot be altered. Bitcoin's blockchain is the original; thousands of others now exist for different purposes.
Wallet (Hot / Cold)
A tool for storing and accessing your crypto. A hot wallet is connected to the internet (MetaMask, exchange wallets) — convenient but more vulnerable to hacks. A cold wallet (hardware wallet like Ledger or Trezor) stores your keys offline — far more secure for long-term holdings.
Seed Phrase (Recovery Phrase)
A series of 12 or 24 words that grants full access to your crypto wallet. Anyone with your seed phrase can access and drain your funds. Never store it digitally. Never share it with anyone. Write it on paper and store it somewhere physically secure.
CEX / DEX
A Centralised Exchange (CEX) is a traditional exchange like Bybit, Binance, or KuCoin — run by a company that holds your funds. A Decentralised Exchange (DEX) like Uniswap runs on smart contracts, letting you trade directly from your wallet without a middleman. CEXs are easier to use; DEXs give you full custody of your assets.
DeFi (Decentralised Finance)
Financial services — lending, borrowing, trading, earning yield — built on blockchain smart contracts without banks or intermediaries. Anyone with a wallet can access DeFi protocols. Higher potential returns than traditional finance, but also higher smart contract risk.
Gas Fees
The transaction fees paid to validators on a blockchain network to process your transaction. On Ethereum, gas fees can spike dramatically during periods of high network activity. This is why many traders prefer Layer 2 networks (Arbitrum, Base) for cheaper transactions.
Staking
Locking crypto in a network or protocol to earn rewards, in exchange for helping validate transactions or providing liquidity. Staking returns vary widely — from stable 4–8% APY on major assets to higher (and riskier) yields on smaller protocols. For a deep dive into staking on an AI network, see our guide on Bittensor and $TAO.
Smart Contract
Self-executing code stored on a blockchain that automatically carries out an agreement when predefined conditions are met — with no middlemen required. Smart contracts power DeFi, NFTs, and most of the crypto ecosystem beyond Bitcoin.
07 — Crypto Slang & Culture
HODL Slang
Originally a typo for "hold" in a 2013 Bitcoin forum post, now means holding crypto through volatility rather than selling. Has evolved into a strategy acronym: "Hold On for Dear Life." Not always the right approach — knowing when to take profits is a skill.
DYOR Slang
Do Your Own Research. A reminder that no one — not influencers, not analysts, not Swiss Circle — can guarantee outcomes. Before putting money into any asset, understand what you're buying, why, and what the risks are.
FUD Slang
Fear, Uncertainty, and Doubt. Negative information — sometimes true, sometimes exaggerated or fabricated — spread to drive down prices or shake out holders. Regulatory headlines, hacks, and negative media coverage are common sources of FUD.
FOMO Slang
Fear of Missing Out. The anxiety of watching an asset pump while you're not positioned in it — leading to impulsive, poorly-timed entries at the top. FOMO is one of the most common and costly emotional mistakes in trading. If you've missed a move, the next opportunity will come.
Rekt Slang
Suffering a significant or total loss on a trade or investment. Derived from "wrecked." Getting rekt usually involves excessive leverage, no stop-loss, or holding through a severe drawdown. The October 10th, 2025 liquidation cascade rekt thousands of overleveraged traders across the market.
Pump and Dump Slang
A manipulative scheme where a group artificially inflates the price of a low-cap asset (the pump) then sells their holdings at the peak (the dump), leaving latecomers holding bags of a rapidly declining asset. Common in small-cap altcoins and meme coins.
Rug Pull Slang
A scam where project developers abandon the project and drain its liquidity after attracting investment. Common in DeFi and new token launches. Warning signs: anonymous team, unaudited contracts, unrealistic APY promises, no product.
Bags / Holding Bags Slang
Holding a position that is deeply in the red and difficult to exit without a large loss. "Bag holder" describes someone stuck in a poor investment, often the result of FOMO buying near the top.
Degen Slang
Short for "degenerate." Originally a self-deprecating term for high-risk, speculative traders — particularly in DeFi. Has evolved into a badge of honour in some communities, describing someone willing to take outsized risks on early-stage opportunities. Not a compliment in the context of risk management.
GM / GN Slang
Good Morning / Good Night. Crypto Twitter greetings used to signal community membership and positive vibes. Posting "GM" has become a ritual, particularly in NFT and Web3 communities.
This glossary is a living document. Crypto moves fast and new terms emerge constantly. We'll update this list regularly as the market evolves. If there's a term you'd like explained, reach out via our contact page.
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