The world of crypto trading is a planet that never sleeps. When navigating the crypto trading landscape, lingo and terms like KYC, REKT, OCO, and Bull and Bear markets are used by crypto traders to describe various cryptocurrency and crypto trading events and situations. You may already know words like Bitcoin, Ethereum, Binance etc., so to better understand the crypto market, here are 20 essential words all crypto traders need to know.
This stands for “Know Your Customer” and is a process in which businesses verify customers” identity by collecting personal information. Centralized Exchanges mostly do KYC in crypto trading to prevent money laundering and fraud.
2. DEX/CEX (Exchanges)
Crypto exchanges are marketplaces or websites/apps where cryptocurrencies are bought and sold, exchanges also perform functions such as swapping cryptocurrencies.
DEX this stand for Decentralized Exchanges. These exchanges operate without a centralized point of authority; therefore, no KYC, which means users have anonymity and can easily access and use them with just their wallet addresses, e.g. Uniswap, Pancake swap etc
CEX mean Centralized Exchanges. These exchanges are controlled by private companies that act as a third party as they ask for user information like name and location that, is there is KYC, they ask for user identification etc. they allow the user to purchase crypto with cash and also withdraw some examples are Binance, Coinbase etc
Read more about DEX/CEX differences, pros and cons here
Individuals or entities hold a vast amount of crypto, especially those that can impact or manipulate the market. Here are some examples of what ETH whales are holding, by looking closely at their holdings could give you an idea of what to do with your next move, either to buy or sell.
4. HODL (Holding on for dear life)
A slang in the cryptocurrency space which means holding an asset, doesn’t sell; instead, maintaining ownership of the coin or digital asset with the hope that the price will increase in the nearest future.
5. Bull market
A state of the crypto market characterized by surging prices of cryptocurrencies, where many people are ”holding” their crypto. During this period, many investors and crypto traders are optimistic that prices will increase and buy coins or tokens, hoping the price will rise.
This is what it means to be bullish, and these players are called bulls. The entire duration of this period of upward price trend in the crypto market is called a bull run.
6. Bear market
The state of the crypto market is characterized by the downward movement of prices of cryptocurrencies; there are pessimistic sentiments towards coins, tokens and assets. Crypto traders and investors, since there will be adverse price movements people are therefore bearish, and they don’t hold but instead sell-off.
During bear runs, people lose money because of the price drops and reduced trading volume.
This slang is used when a crypto trader incurs or suffers heavy losses from a particular trade; it is a shorthand for “wrecked”.
Listing is adding a cryptocurrency to an exchange to buy and sell it easily. This is a crucial step in developing new coins and tokens.
Delisting is the process of removing a cryptocurrency from an exchange. Once this is done, that coin, token or asset can no longer be traded on that particular exchange.
9. Dead cat bounce
This is used to describe a brief rise in the price of a declining coin or stock; this rise is then followed by a fall as the cryptocurrency or stock continues its downward trend. It usually happens in a bear market as traders seek any hope. They, therefore, start anticipating a turnaround after the rise, only for prices to decline further.
Above is a detailed Twitter thread on understanding the concept of dead cat bounce.
10. ATH / ATL
‘ATH’ stands for”All Time High” while ‘ATL’ means “All Time Low”.
These are the highest and lowest points the price of a cryptocurrency has gotten to since its inception.
This is the rate of fluctuation experienced by the price of a cryptocurrency. If there is a high rate of rise and fall in the coin or token prices within a short period, that cryptocurrency is said to be very volatile.
These coins are designed to have a stable or somewhat constant value rather than experience significant price changes. Some are pegged to fiat currencies like the US dollar; stablecoins are used for trading in exchanges.
They facilitate payments and are a good store of value, especially in bear markets when prices fall; examples of stablecoins are BUSD, USDT, DAI etc.
Keep up with the current state of stablecoins with this article below
“Fear Of Missing Out” is the fear and pressure that one might miss out on a potentially profitable opportunity. In crypto trading, FOMO happens when a trader fears missing out on potential profits from a certain trade and becomes inclined to rush into a trade without doing enough research.
Apeing is cryptocurrency trading slang used when a cryptocurrency trader buys a token shortly after the token project launch, that is, a newly launched token project, without conducting thorough research, usually, because they fear missing out on potential gains.
15. Burning/ Burn
Burning is a way of reducing the supply of a coin or token. It is done by permanently removing some amount of the particular cryptocurrency from circulation by sending the amount of coin to be burnt into an inaccessible wallet.
Burning is done to make a coin scarce and can also potentially increase the price of the coin or token.
16. Margin trading
This is a form of trading where crypto traders trade with borrowed funds from third-party brokers or exchanges to increase their leverage and get into better positions; you can trade with more funds than you deposit in your account; it can be very risky because prices of cryptocurrencies are highly volatile and they fluctuate a lot, different exchanges have their various requirements for you to be able to use this service.
Arbitrage is a strategy investors use to exploit price differences between cryptocurrency exchanges or markets. This involves buying a particular cryptocurrency at a business where the price is low and then selling it on another exchange or market where the price is higher. By doing this, investors can make a profit from the price difference.
18. Limit Buy/Sell
This is an order placed by a crypto trader to buy or sell a cryptocurrency at a specific price, the order will be executed only if the market price for that particular coin or token reaches or exceeds the specified price. An order to buy is known as “Limit buy”, while to sell “Limit sell”.
“One Cancels the Other Order” is when a crypto trader places two orders simultaneously. If one order is executed, the other order is automatically cancelled. An OCO order usually consists of two orders: the stop order and the limit order.
The stop order limits losses by setting a stop loss price for a particular cryptocurrency. If the cryptocurrency’s market price falls to the stop loss price, the stop order is triggered, and the trader’s position is automatically sold to minimize losses.
The limit order is used to take profits by setting a target sell price for the same cryptocurrency. If the cryptocurrency’s market price rises to the target sell price, the limit order is triggered, and the trader’s position is automatically sold at a profit.
When using an OCO order, traders can set the stop loss and take profit levels simultaneously, which helps to minimize the risk of potential losses and maximize potential profits.
Read more about OCO here
“Do Your Own Research” is my favourite term in crypto. It is usually encouraged that crypto traders and investors should always do their research. It is like a disclaimer to “look before you leap” before you trade or invest in any coin or token to do your due diligence.
I believe that with an understanding of these terms, keeping up with the fast-paced world of crypto trading will be easier, you will have a better understanding of crypto trading, and you can confidently make informed decisions when trading in the ever-changing crypto market.
Also Read: How To Get Started In Crypto (UPDATED 2023)
Editor’s Note: This article does not represent financial advice. Please do your research before investing.]
Featured Image Credit: ChainDebrief
By Godwin Okhaifo