Beginner’s guide (part 2)
We present the second part of this quick guide for beginners so you can have a slight idea of which are the most used words in the world of digital currency investments.
These are the basic words to keep in mind:
Bull Run
When we talk about a bull run, we are referring to a period of time in which cryptocurrency prices rise significantly, which indicates that we are in a bull market.
Bear run.
In this case, when we talk about a bear run, we are referring to a period of time in which cryptocurrency prices drop significantly, which indicates that we are in a bear market.
Bulls.
In the world of cryptocurrencies, “bulls” refer to all those investors who have very positive prospects for the market to increase and who have great profitable investment opportunities.
Bears
In the world of cryptocurrencies, bears refer to a bearish market trend. Bears are pessimistic investors who believe that the market will continue to fall and seek to profit from the situation.
Alt season.
The Alt Season is a period of time in which the market for alternative cryptocurrencies to Bitcoin experiences a significant increase in value. During this period, altcoins grow faster than Bitcoin, even when investors see that Bitcoin decreases, they begin to invest their money in different altcoins.
hot wallet
A hot wallet is a type of digital wallet for cryptocurrencies that is connected to the internet at all times. This allows the user to carry out operations comfortably and quickly.
Cold wallet.
A cold wallet is a type of digital wallet for cryptocurrencies that is not connected to the internet. These types of wallets are more secure than cold wallets, since they are not exposed to cyber attacks.
Buy the dip.
It is a strategy used by traders and investors to buy a cryptocurrency after the price has fallen, having a correction, with the expectation that its price will rise again in the future.
Market Cap.
The market cap is the capitalization of the financial market, and is used to measure the total value of a cryptocurrency. This indicator is important because it tells us the importance and relevance that a cryptocurrency can have.
DAO
A DAO is a Decentralized Autonomous Organization that operates through smart contracts on a blockchain.
DAOs contain protocols and rules that determine user decision-making through voting.
So a DAO offers that the ideas of some investors in the community can be voted on and evaluated publicly, in a fast and decentralized way.
DEFI
When we talk about decentralized finance (DEFI) we are referring to a financial service system based on blockchain technology, where no government or bank intervenes.
DEFIs, through smart contracts, allow users who own cryptocurrencies the possibility of obtaining interest on them and requesting loans.
This is done without any type of intermediary, carrying out transactions in a transparent and decentralized manner.
Stop loss.
In the world of cryptocurrencies, a stop means placing a sell order on an operation to reduce losses.
This type of operations is very useful in these types of volatile markets, since it allows us to establish a loss limit and thus further protect our investment.
Stop Profit.
The stop profit is about placing an order to sell a cryptocurrency in an area in which we are going to ensure profits.
In this way, the position we have established to collect profits is automatically closed, which reduces risk management.
Endurance.
We speak of resistance when the price of a currency is very high and the force produced by the sales is greater than the copras, so the upward trend would end and a decrease in the price of the asset would occur.
Resistance is one of the fundamental concepts in technical trading analysis, as it identifies areas where investors may be less interested in purchasing assets due to high prices.
Medium.
We find support when the price of an asset stops its decline and this usually coincides with a previous minimum on the charts. This situation causes a downward trend to stop and an upward rebound may occur.
Dominance.
Dominance in the world of cryptocurrencies refers to the market capitalization of Bitcoin compared to the total capitalization of the rest of the cryptocurrencies.
Leverage.
When we talk about leverage we are referring to a strategy of borrowing funds so that we increase our profits when operating in cryptocurrencies, with the risk that we can also have large losses.
Hardfork.
The hardfork or bifurcation is a fundamental concept in the world of blockchain and cryptocurrencies, since it represents a significant change in the protocol by changing the rules of the current version in its blockchain.
Airdrop.
An airdrop is a marketing strategy used by many projects to promote themselves and make themselves known.
It consists of distributing its tokens for free to users. They are generally given away in exchange for meeting a series of requirements, such as carrying out some transactions or giving visibility to the project on the user’s social networks.
NFTs
An NFT is a non-fungible token, that is, a digital identifier that is registered on the blockchain and is used to certify the authenticity and ownership of an asset.
They are usually used as digital assets in topics related to art, music, sporting events and have certain privileges depending on the NFT owned.
These are a few of the most used words in the world of cryptocurrencies.
If you want to access the 1st part you can do it from here.
