Glossary
Volatility
How widely and how quickly a price moves. Higher volatility means a wider range of outcomes.
Volatility measures the size and frequency of price movements. Crypto is historically more volatile than most asset classes, with moves that would be extraordinary in equities treated as routine.
It cuts both ways. A wider range of outcomes means more room for a leveraged position to be liquidated and more room for a stop-loss to trigger on noise.
Volatility is not the same as a trend. An asset can be extremely volatile while going nowhere, which is the worst environment for both leveraged trading and tight stop placements.
Related terms
Airdrop
Free tokens distributed to wallet addresses, usually to reward early users of a protocol.
AMM
Automated Market Maker — a protocol that prices assets with a formula instead of an order book.
APR vs APY
APR is the yearly rate without compounding; APY includes compounding and is always higher.
ATH
All-Time High — the highest price an asset has ever traded at.
Bear Market
A prolonged decline, conventionally 20% or more from recent highs.
Bull Market
A prolonged rise driven by new demand, easy credit and rising confidence.