Crypto Trading and Markets Flashcards

What does the term 'slippage' mean in crypto trading?

Answer: The difference between expected and actual execution price

Slippage occurs when market movement or low liquidity causes a trade to execute at a different price than quoted.

Which order type guarantees execution but not price in crypto markets?

Answer: Market order

A market order executes immediately at the best available price, guaranteeing fill but not the exact price.

What is a 'funding rate' in perpetual futures contracts?

Answer: A periodic payment between long and short traders to anchor price to spot

Funding rates are periodic payments exchanged between longs and shorts to keep the perpetual contract price close to the underlying spot price.

What is 'wash trading' in the context of cryptocurrency exchanges?

Answer: Simultaneously buying and selling to inflate reported volume

Wash trading involves a party buying and selling the same asset to create artificial volume, often to mislead other traders.

In crypto markets, what does 'open interest' measure?

Answer: The total value of all unsettled futures or options contracts

Open interest represents the total number of outstanding derivative contracts that have not been settled, indicating market activity and sentiment.

Which metric best represents the ease of buying or selling a cryptocurrency without affecting its price?

Answer: Liquidity

Liquidity measures how quickly an asset can be bought or sold near its current price without causing significant price movement.

What does a 'death cross' signal in crypto technical analysis?

Answer: The 50-day MA crossing below the 200-day MA

A death cross occurs when the 50-day moving average crosses below the 200-day moving average, signaling potential long-term bearish momentum.