Learn to read charts/graphs, understand trends, get a head start on
when to invest in coins before a bull run to maximize profit, and much
First off, congratulations on taking the next step to secure your financial future! As we all know, cryptocurrency is the currency of the future and it’s important to get a head start to ensure that you take the proper steps needed to gain the most profit. In this guide, we are going to go over all of the ins and outs of cryptocurrency. We are going to get a solid foundation on how to read graphs, understand trends, different analysis types, know when a pump/dump may take place, and much more so by the time you’re done going through the guide, you will have a great understanding of how to actually make smart decisions that will earn you money.
When it comes to cryptocurrency, it’s extremely important to know the analytics and how to understand the system, but it is also crucial to
understand the terminology that you will encounter in the crypto-world. Below you will find common terminology and a description of them.
The opposite of a bear market is a bull market. Traders are speculating that an asset will rise in value.
When you hear the phrase “it’s a bear market” or “the market is bearish”, investors are referring to the speculation that assets (cryptocurrencies) will decline in value.
ATH (All-Time High)
ATH, or all-time high, is simply a term used when a cryptocurrency reaches a value that is hasn’t reached before, giving it an “all-time high”.
When a cryptocurrency coin is developed, there are certain rules and protocols that the coin is based around. When a developer updates the protocols, the previous protocol usually becomes incompatible with the new chain being developed, causing a fork to happen.
A government regulated currency, also known as money. Examples are USD and Euros.
FOMO (Fear Of Missing Out)
Investors are known to have a fear of missing out. When an investor believes that a crypto asset is going to rise in value, the investor will begin purchasing the specific asset, so they do not miss out on their speculated value increase to maximize profits.
FUD (Fear, Uncertainty, and Doubt)
The point of this term is a type of market manipulation. Essentially incorrect and misleading information is spread to try and decrease the value of an asset. Once the value decreases, the investor will reinvest at a lower price so when the asset rises, they will receive more profit.
HODL (Hold On for Dear Life)
A common cryptocurrency strategy where traders simply purchase an asset and just hold the currency for an extended amount of time even if it’s rising or falling in price.
A term used to describe the total market value of an asset. The market cap is calculated by multiplying the market price by the total number of coins in circulation. An example of this is if an asset is worth $5.00 and there are 100 coins in circulation, then the market cap is $500.
A very common term is “(altcoin name) to the moon”. This is simply referring to a sudden and steep rise in value.
Pump & Dump
A market manipulation scheme where there is rapid inflation of a cryptocurrency and once the value reaches a certain threshold, the investors will sell the assets gaining massive profit. Once the dump occurs, the price of the asset will significantly decrease.
ROI (Return on investment)
Once an investor invests money into a cryptocurrency, they are hoping to actually receive profit from the investment once the asset rises. It is calculated via a ratio or percentage that shows how much the investor made.
A resistance line is drawn though each peak of the price. This is where buyers halt and the sellers begin to sell, evidently lowering the price.
The act of selling a digital asset hoping that it falls in value so the investor can buy back in at a lower price.
Used during technical analysis. A support line is drawn across points where the price bottomed out before going back up again. Investors were selling and lowering the price, but there were enough buyers to push the price back up.
An investor who can push extremely large transactions and influence the market to either decrease or increase in value.
When a cryptocurrency is developed, the developers provide what is called a “white paper”, which should give users comprehensive information on what the cryptocurrency is, proper use cases, and innovations they implemented.