Crypto glossary: 84 terms explained in plain English

The essential vocabulary of crypto and trading, explained in plain English.

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Glossary of cryptocurrency and trading terms, with their definition in English.
Term	Definition
Airdrop	Free distribution of tokens or cryptocurrencies to a community of users, normally as a marketing strategy, a reward for holders or a way of making a new project known. It usually requires completing tasks beforehand (following social accounts, holding a certain amount of a coin, and so on).
Alt Season	Period in which altcoins post sharper price rises than Bitcoin. BTC dominance tends to fall and capital flows towards alternative projects. Historically it happens after a strong Bitcoin bull run.
ALTCOIN	Any cryptocurrency that is not Bitcoin (BTC). The term comes from "alternative coin". It includes Ethereum, Solana, BNB, Polkadot and so on. Their behaviour is usually closely correlated with BTC. See the cryptocurrency catalogue
APY / APR	APY (Annual Percentage Yield): annual return that includes the effect of compound interest. APR (Annual Percentage Rate): annual return without compound interest. Both are used to express the return on staking, lending or yield farming. Work out compound interest
TA / FA	Technical Analysis (TA): the study of price and volume through charts in order to predict future movements. Fundamental Analysis (FA): the assessment of the intrinsic value of a project based on its technology, team, adoption and use cases.
ATH (All Time High)	Highest price a cryptocurrency has reached since it was created. It is a key reference level: breaking the ATH tends to trigger heavy buying (FOMO) because there is no earlier resistance above it. See the ATH of every coin
ATL (All Time Low)	Lowest price ever recorded by a cryptocurrency. It is the opposite of the ATH and serves as a reference for the worst price scenario the asset has lived through. See how far each coin is from its high
Bag Holder	Investor who holds a cryptocurrency that has fallen sharply in price and keeps holding at a loss, waiting for a recovery that may never come.
Bear Run / Bear Market	Prolonged period of widespread market falls, with negative sentiment dominating. A market is considered bearish when the price falls more than 20% from its recent highs. See the market summary for today
BEARISH	A downward price trend or expectation. A "bearish" trader expects the price to fall and may open SHORT positions to profit from that fall.
Blockchain	Distributed and immutable ledger technology in which transactions are grouped into cryptographically chained blocks. No central entity controls it: its integrity is guaranteed by a network of decentralised nodes.
Break Even (BE)	Moving the Stop Loss to the entry price of the trade. That way, if the market turns against you, the trade closes with neither a loss nor a gain, removing the risk from the position.
Breakout	Break of a relevant support or resistance level on volume. It is a technical signal indicating that the price could carry on in the direction of the breakout. A break to the upside is bullish; a break to the downside is bearish.
Bridge	Protocol that allows assets or data to be transferred between two different blockchains (for example, from Ethereum to BNB Chain). They are key components of the multi-chain ecosystem but have been a frequent target of hacks.
Bull Run / Bull Market	Prolonged period of widespread rises in the crypto market with very positive sentiment, heavy buying activity and a mass influx of new investors. Historically, crypto bull runs have coincided with the years following the Bitcoin halving. See the market summary for today
BULLISH	An upward price trend or expectation. A "bullish" trader expects the price to rise and will open LONG positions to profit from that rise.
BUY the Dip (BTD)	Strategy that consists of buying an asset during a correction or a one-off fall in price, assuming that the main trend is still upward and that the price will recover.
CEX	Centralised Exchange. Trading platform run by a company that acts as an intermediary. It offers greater liquidity and ease of use, but it means giving up custody of the funds. Examples: Binance, Coinbase, Kraken. Which exchanges are authorised in Spain
Cold Wallet	Wallet that keeps the private keys with no internet connection (a hardware wallet or paper). It is the recommended way to store large amounts, because a virus on your computer cannot read the keys. It does not protect you from everything: if you approve a malicious transaction, it goes out signed and cannot be undone, and anyone who gets your seed phrase can reach the funds. Examples of hardware wallets: Ledger, Trezor.
Smart Contract	Self-executing code stored on the blockchain that runs automatically when the programmed conditions are met, with no need for intermediaries. They are the basis of DeFi, NFTs and most decentralised protocols.
Correction	Temporary fall in price (generally between 10% and 20%) within a larger upward trend. It is a natural market movement that "digests" the rises. It does not break the main trend. See the market summary for today
DAO	Decentralised Autonomous Organisation. Entity governed by its members through voting tokens and smart contracts, with no centralised hierarchy. Decisions are taken by on-chain consensus.
DApp	Decentralised Application that runs its logic on the blockchain through smart contracts. It does not depend on centralised servers. Examples: Uniswap, Aave, OpenSea.
DCA (Dollar-Cost Averaging)	Investment strategy that consists of buying a fixed amount of an asset at regular intervals (weekly, monthly and so on) regardless of the price. It reduces the impact of volatility and the risk of buying at the highs. Simulate a regular contribution
Dead Cat Bounce	Temporary and misleading price recovery after a sharp fall, which does not signal a real change of trend. The price bounces briefly before carrying on down. The name comes from the saying that "even a dead cat bounces if it falls from high enough".
DeFi	Decentralised Finance. Ecosystem of financial products and services (lending, exchange, yield) built on public blockchains through smart contracts, with no banks and no intermediaries.
DEX	Decentralised Exchange. Cryptocurrency trading platform with no central intermediary, where trades are executed directly between users through smart contracts. Examples: Uniswap, PancakeSwap, dYdX.
Diamond Hands	Colloquial term describing an investor with strong conviction who holds a position without selling through heavy falls or high volatility. The opposite of "paper hands".
Dominance (BTC Dominance)	Percentage that the market capitalisation of Bitcoin represents out of the whole crypto market. High dominance means capital is concentrated in BTC; low dominance usually coincides with the Alt Season. See the Bitcoin profile
DUMP	Abrupt and sharp fall in the price of an asset in a short time, generally caused by coordinated mass selling or by market panic. It usually happens after an artificial PUMP.
DYOR	"Do Your Own Research". A common warning in the crypto community, there to remind every investor to analyse a project on their own account before investing, rather than blindly trusting recommendations from third parties.
Fibonacci	Technical analysis tool based on the Fibonacci mathematical sequence. The levels most used in crypto are 38.2%, 50%, 61.8% and 78.6%, which mark possible support or resistance zones during a correction or an extension of the price.
FOMO (Fear Of Missing Out)	Fear of missing out on a chance to profit. It leads to impulsive buying at the highs when the price has already risen a great deal, increasing the risk of losses. It is one of the most damaging emotions in trading.
Fork	Change in the protocol of a blockchain. A Hard Fork creates a completely new chain that is incompatible with the previous one (for example, Bitcoin Cash out of Bitcoin). A Soft Fork is a change that stays compatible with earlier versions.
FUD	"Fear, Uncertainty and Doubt". Negative, false or exaggerated information spread in order to create panic and cause price falls. It can be spontaneous or deliberately manipulated.
Funding Rate	Financing rate paid periodically between long and short traders in perpetual futures markets. If it is positive, the longs pay the shorts; if it is negative, the other way round. It indicates market sentiment.
FUTURES	Financial contract to buy or sell an asset at an agreed price in the future. With perpetual futures you do not own the asset, you only speculate on its price. It allows leverage to be used, which amplifies both the gains and the losses.
Gas / Gas Fee	Fee paid to the validators of a blockchain network for processing and confirming a transaction. On Ethereum it is measured in Gwei. Its cost varies with the congestion of the network.
Halving	Scheduled event in Bitcoin that halves the reward miners receive for each block. It happens roughly every 4 years (every 210,000 blocks). Historically it has come before large bull runs by reducing the issuance of BTC. See the Bitcoin profile
Hardware Wallet	Physical device (similar to a USB stick) that stores the private keys offline. It is the safest custody solution for large amounts of cryptocurrency. Examples: Ledger Nano, Trezor.
HODL / HOLD	Long-term investment strategy that consists of holding a cryptocurrency without selling regardless of the volatility. The term "HODL" was born out of a typo on a forum in 2013 and became an acronym for "Hold On for Dear Life".
Hot Wallet	Wallet connected to the internet. More convenient for frequent trading but more vulnerable to hacks. Examples: MetaMask, Trust Wallet. Not advisable for storing large amounts.
ICO / IDO / IEO	Fundraising methods for crypto projects. ICO (Initial Coin Offering): a direct sale to the public. IDO (Initial DEX Offering): a launch on a DEX. IEO (Initial Exchange Offering): a launch through a CEX such as Binance Launchpad.
Layer 1 / Layer 2	Layer 1: the base blockchain (Bitcoin, Ethereum, Solana). Layer 2: a solution built on top of an L1 to improve its scalability and reduce fees (Lightning Network for BTC, Polygon/Arbitrum/Optimism for ETH).
Liquidation	Forced closing of a leveraged position when the losses reach the margin deposited. The exchange liquidates the position automatically to stop the trader from running into debt.
Liquidity	How easily an asset can be bought or sold without significantly affecting its price. High liquidity = a small spread and fast execution. Low liquidity = more difficulty getting in and out and a greater impact on the price.
LONG	Opening a trade betting that the price will rise. On SPOT you buy the asset directly. On FUTURES you open a long contract and can use leverage. You gain if the price rises; you lose if it falls. Work out the price of a cryptocurrency
MACD	Moving Average Convergence Divergence. Technical indicator that shows the relationship between two exponential moving averages of the price. It is used to identify changes of trend, momentum and possible entry and exit signals.
MCAP (Market Cap)	Market capitalisation. It is worked out by multiplying the current price of the coin by the number of coins in circulation. It measures the relative size of a project. Not to be confused with volume. See the capitalisation of the market
Mempool	Waiting area where the transactions pending confirmation by the miners or validators pile up. When there is a lot of activity on the network, the mempool fills up and fees (gas) rise.
Mining	The work by which participants in a Proof of Work network (such as Bitcoin) decide which transactions go into the next block. It is a computational lottery: miners keep trying combinations in search of a number that meets a certain condition, and whoever finds it proposes the block and collects the reward in new coins and fees. Nobody solves equations: the chance of winning is proportional to computing power, which is paid for in electricity, and that cost is what makes rewriting the chain's history so expensive.
NFT (Non-Fungible Token)	Non-fungible token: a unique, unrepeatable digital asset recorded on the blockchain that certifies the ownership and authenticity of a digital item (art, music, collectibles and so on). Unlike cryptocurrencies, every NFT is one of a kind.
Node	Computer that takes part in the blockchain network by storing a copy of the transaction history and helping to validate it. The more nodes there are, the more decentralised and the more resistant to attack the network is.
Bears	Sellers who put downward pressure on the market. The name comes from the symbol of the bear, which attacks downwards. In a bear market the bears are in charge. The opposite of Bulls.
Paper Hands	Investor who sells in a panic at the first significant fall, unable to sit through the volatility. The opposite of "diamond hands". They tend to sell at the lows and miss the recovery.
Liquidity Pool	Smart contract holding reserves of two or more tokens that users can swap on a DEX. Liquidity providers deposit their funds and receive fees in return. They are the basis of the AMM (Automated Market Maker) model.
PUMP	Rapid and artificial rise in the price of an asset, normally coordinated by groups that buy heavily to attract FOMO investors, and then sell (DUMP) to profit at the expense of the newcomers. A scheme known as "Pump & Dump".
REKT	From the English "wrecked". It is used to describe a trader who has lost most or all of their investment, generally through a liquidation on futures or by holding an asset that has collapsed.
Resistance	Price level at which supply has historically outweighed demand, slowing or reversing the rises. The price "bounces" off that level several times. If it breaks through to the upside, the resistance becomes support.
RSI (Relative Strength Index)	Momentum indicator that measures the speed and the size of price movements. It ranges between 0 and 100. Above 70 it indicates overbought conditions (a possible correction); below 30 it indicates oversold conditions (a possible bounce).
Rug Pull	Scam in which the creators of a crypto or DeFi project abandon it abruptly and disappear with the funds of the investors. It is especially common in tokens whose liquidity is not locked.
SCAM	Fraud in the crypto world. It can take many forms: fake projects, phishing, Ponzi schemes, promises of impossible returns, impersonation and so on.
Seed Phrase	Set of 12 or 24 words generated when a wallet is created that works as the master backup. Whoever has the seed phrase has full access to the funds. It must never be shared or stored digitally.
SHITCOIN	Derogatory term for a cryptocurrency with no real value, no solid technology and no legitimate use case. They tend to be created to enrich their founders at the expense of unwary investors.
SHORT	Opening a position betting that the price will fall. It is traded mainly on futures or by borrowing assets (margin). You gain if the price falls; the losses are theoretically unlimited if the price rises. Work out the price of a cryptocurrency
Slippage	Difference between the expected price of a trade and the price at which it is actually executed. It happens because of a lack of liquidity or high volatility. Especially relevant on DEXs with low-liquidity pools.
Support	Price level at which demand has historically outweighed supply, slowing or reversing the falls. The price "bounces" at that level. If it breaks through to the downside, the support becomes resistance.
SPOT	Market where you buy and are the real owner of the asset. There is no leverage by default. The price you see is the real market price and the trade settles instantly (or almost). It is the kind of trading most advisable for beginners. See spot prices
Staking	Putting your coins up as collateral on a Proof of Stake network (such as Ethereum, Solana or Cardano) to back a validator that orders and validates transactions. If it behaves, the network pays it and it passes on your share, in the same coin; if it cheats or stops working, the network takes away a portion of what was committed (slashing), yours included. It is neither a bank deposit nor a loan: part of the yield usually comes from newly issued coins, and getting them back can take days. Work out the accumulated return
STOP LOSS (SL)	Automatic sell order triggered when the price reaches a level set in advance below the entry. It caps the maximum loss on a trade and is a fundamental risk management tool.
SUPPLY	The supply of a cryptocurrency. The Circulating Supply is the coins circulating on the market. The Max Supply is the maximum that will ever exist (Bitcoin: 21 million). The Total Supply includes the coins not yet distributed.
SWING Trading	Trading style that looks to capture price "swings" over days or weeks. The price moves in a zig-zag and the swing trader buys at local lows and sells at local highs within a larger trend.
TARGET / TAKE PROFIT (TP)	Price level set in advance at which a trade is closed to bank the profit. It is the profit target. A good trading strategy always defines the TP before entering a trade.
Tokenomics	The economics of a token: initial distribution, total supply, inflation and deflation, burn mechanisms, vesting, utility and value flows. Analysing the tokenomics is essential before investing in any project.
To The Moon 🚀	Colloquial expression meaning that the price of a cryptocurrency is rising, or is expected to rise, in a spectacular and sustained way. It is used both seriously and ironically in the crypto community.
Bulls	Buyers who put upward pressure on the market. The name comes from the symbol of the bull, which attacks upwards with its horns. In a bull market the bulls are in charge. The opposite of Bears.
TVL (Total Value Locked)	Total value of the assets deposited in a DeFi protocol. It is a key metric for measuring the size of a protocol and the trust it generates. The higher the TVL, generally the greater the liquidity and adoption.
Vesting	Period during which the tokens of a team, investors or contributors are locked and cannot be sold. It protects the market from sudden mass selling. A long vesting period is a sign that the team trusts the project.
Volume	Total amount of an asset traded over a period of time. It confirms whether price movements are valid: a rise on high volume is more reliable than one with no volume. Low volume can point to a trap or to a lack of interest. See the volume traded today
Wallet	Software or device that stores the private keys and makes it possible to manage cryptocurrencies. It does not "store" coins as such (those are on the blockchain), but the keys that prove ownership. It can be hot (online) or cold (offline).
Web3	The vision of a new, decentralised version of the internet, based on blockchain, where users own their data and their digital assets, as opposed to Web2, where large centralised platforms (Google, Meta) control the data.
Whale	Investor or entity holding such a large amount of cryptocurrency that its movements can significantly influence the market price. Their transactions are watched because they can come before big moves.
Whitepaper	Technical document published by a blockchain project setting out its technology, value proposition, tokenomics, roadmap and team. Reading the whitepaper is the first step in the fundamental analysis of any project.
Yield Farming	DeFi strategy to maximise the return on assets by depositing them in different protocols one after another. It involves providing liquidity, staking and reinvesting the rewards. High potential return but also high risk. Work out the accumulated return

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