Crypto Trading Glossary

01

BTC Dominance

The percentage of total crypto market capitalization held by Bitcoin. When BTC Dominance rises, capital is flowing into Bitcoin and away from altcoins. When it falls, money rotates into alts, signaling the start of altcoin season.

02

Altcoin Season

A period when altcoins collectively outperform Bitcoin, identified by a sustained decline in BTC Dominance. This is where life-changing gains happen for traders who position early. The key is watching BTC.D for structural breakdowns before the crowd catches on.

03

20 EMA

The 20-period Exponential Moving Average, a short-term trend indicator that reacts quickly to price changes. When price is trading above the 20 EMA, bulls are in control. When it drops below, momentum is shifting and traders need to pay attention.

04

200 EMA

The 200-period Exponential Moving Average, the long-term trend indicator that separates bull markets from bear markets. Price above the 200 EMA means the macro trend is bullish. Price below it means the bears are in charge and capital preservation becomes the priority.

05

EMA Crossover

The moment when the 20 EMA crosses above or below the 200 EMA, signaling a major trend shift. A bullish crossover, where the 20 crosses above the 200, is one of the most reliable signals that a new uptrend is starting. The bearish crossover is the opposite and demands respect.

06

Wyckoff Method

A framework for reading how institutional players accumulate and distribute positions in the market. Developed by Richard Wyckoff, this method reveals the footprints of smart money through price and volume analysis. It is the foundation for understanding why markets move the way they do.

07

Accumulation Phase

The Wyckoff phase where smart money quietly builds positions while retail traders are still fearful or disinterested. Price moves sideways in a range as institutions absorb supply. Recognizing accumulation early is what separates consistently profitable traders from the rest.

08

Distribution Phase

The Wyckoff phase where smart money sells their positions into retail demand and euphoria. Price appears strong on the surface while institutions are offloading. This is where most retail traders buy the top, and understanding distribution is critical to avoiding that trap.

09

Liquidity Trap

An engineered price move designed to trigger stop losses and liquidate leveraged positions before the market reverses in the intended direction. Market makers and whales use these traps to grab liquidity from predictable retail traders. If a move feels too obvious, it probably is.

10

CME Gap

A price gap on the CME Bitcoin futures chart that forms when the traditional market closes for weekends and holidays while crypto keeps trading. These gaps have a strong historical tendency to get filled, making them valuable targets for directional bias.

11

Fear and Greed Index

A sentiment indicator that measures market emotion on a scale from 0 to 100, where 0 represents extreme fear and 100 represents extreme greed. Smart traders use this as a contrarian signal. When the crowd is terrified, opportunities emerge. When everyone is euphoric, risk is at its highest.

12

Position Sizing

The discipline of determining how much capital to allocate to each trade based on risk tolerance and conviction level. Position sizing is the difference between surviving a drawdown and blowing up an account. Get this right and the rest of your strategy has room to work.

13

The 1% Rule

The risk management principle that no single trade should risk more than 1% of total trading capital. This is non-negotiable. Following this rule means a string of losses will not destroy your account, and you will always live to trade another day.

14

Stop Loss

A predetermined exit point set before entering a trade that limits downside risk if the market moves against you. Every trade needs a stop loss before entry, no exceptions. Trading without one is not trading. It is gambling.

15

Liquidation Cascade

A chain reaction of forced selling that occurs when leveraged positions get liquidated, pushing price further down and triggering more liquidations. These cascades create the violent wicks and flash crashes that wipe out overleveraged traders. They also create some of the best buying opportunities.

16

Bitcoin Halving

An event occurring approximately every four years that cuts the Bitcoin block reward in half, reducing the rate of new BTC supply entering the market. Historically, halvings have preceded major bull runs as reduced supply meets growing demand. Understanding halving cycles is essential for long-term positioning.

17

Market Cycle

The four repeating phases that every market moves through: accumulation, markup, distribution, and markdown. Knowing which phase the market is in determines whether you should be buying, holding, selling, or sitting in cash. Trade the cycle, not the noise.

18

Smart Money

Institutional players, whales, and market makers who have the capital and information to move markets. Smart money leaves footprints in price action and volume that can be tracked using frameworks like Wyckoff. Following their lead is far more profitable than following retail sentiment.

19

Volume Confirmation

The practice of using trading volume to validate breakouts and trend changes. A breakout on high volume signals genuine conviction behind the move. A breakout on low volume is suspect and likely to fail. Volume does not lie, and it should be part of every trade decision.

20

Multiple Timeframe Analysis

The method of reading charts across different timeframes to find confluence and build conviction in a trade setup. The higher timeframe sets the direction, the lower timeframe provides the entry. Trading without checking multiple timeframes is like driving with blinders on.