Everyday lingo of crypto trading and investment you must know

NEW DELHI: For all those interested in trading cryptocurrencies, it is essential to know and understand the vocabulary of daily use. We familiarize you with essential terminology that will help you better assess trading patterns and price trends.
Here is a detailed analysis of the glossary to understand the price charts, patterns and trends of cryptocurrencies:
* Circulating supply: circulating supply means the amount of coins or tokens that are circulating in the cryptocurrency market and that are accessed by the public.
– Circulating supply increases or decreases over time.
– It depends on the frequency of mining, which generates new coins every 10 minutes in the case of Bitcoin.
The circulating supply of Bitcoin will increase further, until the total stock of 21 million coins is mined.
– The circulating supply can also be intentionally reduced to increase the value created due to a shortage of coins or tokens at the moment.
– Artificial scarcity is made by burning coins regularly.
* Market capital: the classification of cryptocurrencies is done on the basis of market capitalization or market capitalization.
– Market capitalization is determined by multiplying the total number of coins mined by the price of a single coin at any given time.
* The market capitalization of cryptocurrencies explains the following:
– It is a criterion to measure the stability of digital assets.
– A higher market capitalization indicates a less volatile cryptocurrency to trade.
– A cryptocurrency with a lower market capitalization is susceptible to market trends and can suffer sudden and steep gains and losses.
Based on market capitalization, cryptocurrencies are classified into three types:
* Large-cap cryptocurrencies: those that have a market capitalization of more than $ 10 billion and that investors consider less risky.
– Bitcoin, Ethereum and Solana are some of the examples in this category.
* Mid-cap cryptocurrencies have a market cap that ranges from $ 1 billion to $ 10 billion.
– These are riskier than large caps and also have untapped potential.
– The FTX token and Hedera are examples.
* Small-cap cryptocurrencies are those that have market capitalizations below $ 1 billion, and are the most volatile and heavily influenced by market sentiments.
– Terra and Immutable X are examples.
Liquidity: This term is also one of the most used in the crypto market.
– Liquidity refers to the capacity and ease with which a cryptocurrency can be converted into cash without reducing the value of the virtual currency. Among all digital assets, Bitcoin has the highest liquidity.
– Liquidity increases in general with the increasing adoption of cryptocurrency and a greater acceptance of cryptocurrencies as a medium of exchange.
– High liquidity means less volatility. The level of liquidity generally depends on the number of users on a particular platform, the volume of trades, and the frequency of trades.
– A normally liquid cryptocurrency trades around its market price.
* Trading Volume – Trading volume or simply the volume of the cryptocurrency means the total number of crypto units traded in a particular time period.
– This trading volume is calculated using the following data:
Crypto exchanges record the transactions in which a buyer and seller reach an agreement at a specific price.
– Higher cryptocurrency trading volume implies a flourishing market with sustained buyer interest and increased liquidity.
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