A lot of people are investing and making a kill in cryptocurrencies. Maybe you are thinking about doing the same, and that's highly recommendable. However, before you invest in cryptocurrency, familiarizing yourself with certain technical terms is crucial as you'll come across these terms quite often. In this article, we break down the top 5 most commonly used terms in the world of crypto trading:
1. Retracements / Retracement Process
A retracement or retracement process refers to the temporary reversal of a trend in a cryptocurrency's price. It's characterized by a short-term period of a shift against a specific trend, followed by a return to the previous trend. This can be used in conjunction with other things as technical indicators. But it should never be used alone.
2. Market Capitalization
Also known as "Market Cap," this refers to the entire value of all the coins that have been mined for a particular cryptocurrency. It's calculated by multiplying the price of the cryptocurrency by the number of coins in circulation. For example, if the total number of Coin Y(valued at $20) that have been mined so far is 1000, Coin Y's market cap will be 1000 X $20 = $20000.
N/B: This is one of the most popular crypto terms you must be conversant with if you want to understand the trade better.
TVL is an acronym for the phrase "Total Value Locked. This indicates the sum of all assets that are currently locked up in a given cryptocurrency platform. TVL to Market Cap Ratio is therefore the ratio between the total value of a cryptocurrency locked in a given crypto platform and the total value of the coins that have been mined that belong to that particular crypto.
Pulse is a form of cryptocurrency just like Bitcoin, Litecoin, Dogecoin, or any other coin. A Pulse tool is a tool that enables you to transact this digital coin effectively and securely. A good example is Coinbase, which allows you to buy, sell, transfer, and store the Pulse digital currency securely and conveniently.
DYOR is an acronym for the phrase "Do Your Own Research." Doing your own research is an important precautionary measure to take before investing in a cryptocurrency. It lowers your chances of getting duped or investing in the wrong digital currency.
Before you get started with cryptocurrency investing, you should make a point to familiarize yourself with a few technical terms that are commonly used in this industry. Knowing the meanings of common terms such as Market Cap, TVL to Market Cap Ratio, retracement process, and DYOR will not only enable you to understand crypto trading better but also trade more effectively. With that said, I hope this article provided you with a great start towards gaining digital currency trading knowledge.
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