Glossary
Trader glossary
Crypto trading terms in short: the definition, the current market number and where to see it.
B
Basis
Basis is the difference between a coin’s futures price and its spot price.
Bitcoin dominance
Bitcoin dominance (BTC.D) is bitcoin’s share of the total crypto market cap.
Bollinger Bands
Bollinger Bands are a channel around a moving average whose width depends on volatility.
Break-even point
The break-even point is the price at which a trade closes flat after fees and funding.
D
F
Fear and greed index
The fear and greed index is a gauge of market sentiment on a 0 to 100 scale, from extreme fear to extreme greed.
Funding arbitrage
Funding arbitrage is earning the difference in rates: a position where you get paid against the same position where you pay.
Funding rate
The funding rate is a periodic payment between longs and shorts of a perpetual future that keeps its price close to spot.
L
Layer 2 (L2)
A layer 2 is a blockchain on top of Ethereum that processes transactions cheaper and faster and records the result on Ethereum.
Leverage
Leverage is the multiple by which a position exceeds the margin put up.
Liquidation
Liquidation is the forced closing of a position by the exchange when margin is no longer enough to cover the loss.
Liquidity
Liquidity is how easily a coin can be bought or sold in size without noticeably moving the price.
Long/short ratio
The long/short ratio is the share of accounts on an exchange positioned for a rise versus those positioned for a fall.
M
P
Perp DEX
A perp DEX is a decentralized perpetual futures exchange where trades settle on a blockchain and funds stay in the trader’s wallet.
Perpetual futures
A perpetual future is a contract on a coin’s price with no expiry: a position can be held indefinitely while paying or receiving funding.
PnL
PnL (profit and loss) is the profit or loss on a trade in money.
R
Relative volume (RVOL)
Relative volume is how many times a coin’s current trading volume exceeds its usual average.
Risk-reward ratio
The risk-reward ratio is how many times the potential profit of a trade exceeds its potential loss.
RSI
RSI (relative strength index) is an oscillator from 0 to 100 comparing the strength of recent price gains and losses.
S
Short squeeze
A short squeeze is a sharp price rise in which shorts are forced to buy back, pushing the price even higher.
Slippage
Slippage is the difference between the price you expected and the price your order filled at.
Stablecoin
A stablecoin is a token whose price is pegged to a currency or an asset, most often the US dollar.