We are shifting gears towards intermediate concepts by tackling common indicators used for trading and investments. These are common market indicators that you'll find in every trading platform and are extremely useful if you're looking at lines on the chart and trying to figure out what they mean. Understanding these pairs helps you spot trends, gauge volatility, and assess long-term value.

You see the bars going up and down, but do they represent money spent or money at risk?

Both metrics track "how much" is happening in the market, often leading traders to ignore one for the other. They both measure market liquidity and participation levels. However, the difference is the time period that's being covered.

• Volume: This indicator matches a cash register receipt. It tracks trades that have already happened and settled. You'll see this as green or red bars in most trading platforms.

  • Market Insight: Traders use volume to see if a price move is real to confirm the trend. A price spike with high volume means investors are actually buying. A price spike with low volume is often a "fake out" or a trap.
    

• Open Interest (OI): This indicator matches a poker table full of active bets. It tracks contracts that are currently open and not yet settled. You'll find this being used for derivatives or futures trading.

  • Market Insight: Rising open interest means more leverage is entering the system. High open interest often precedes a massive volatility spike, a liquidation cascade, or a "short squeeze."

The Takeaway: While volume confirms the past trend, open interest loads the spring for the future move.

All moving averages smooth out the noise. The difference is how fast they turn the wheel.

They are both technical indicators that smooth out price data and look like identical lines on a chart, but they give buy/sell signals at completely different times.

• SMA (Simple): Like a cruise ship, it turns slowly. It averages all prices in the period equally, giving no preference to yesterday over last month.

  • Market Insight: This indicator is used by long-term holders and investors to see the "true" trend without the noise of daily volatility. It is slow to react but reliable (e.g., the "Golden Cross" strategy).

• EMA (Exponential): Like a speedboat, it turns instantly. It applies a heavy weight to the most recent prices, reacting to new data immediately.

  • Market Insight: This indicator is commonly used by day traders to catch a trend reversal early or scalp short-term moves. It gets you in faster, but it also gives more "false alarms" than the SMA.

The Takeaway: Use SMA for the long journey; use EMA for the daily race.

"Tokenomics" usually boils down to whether the pie is getting bigger or the slices are getting scarcer. New investors tend to assume that all crypto has a fixed supply like Bitcoin. However, most don't.

These terms are both used to describe the supply mechanics and how the total number of coins/tokens changes over time. However, for better or worse, they could also create a long-term price impact on the tokens you're holding.

• Inflationary: Like a printing press. The protocol programmatically creates new coins to reward miners or stakers (e.g., Dogecoin).

  • Market Insight: Inflationary tokens are good for network security (paying the guards), but the price will struggle to go up unless buying demand outpaces the constant "printing" of new supply.

• Deflationary: Like a furnace. The protocol programmatically destroys (burns) a portion of existing coins (e.g., BNB or ETH post-merge).

  • Market Insight: Deflationary tokens would favour long-term holding. The scarcity automatically increases over time, theoretically driving the price up even if demand remains steady.

The Takeaway: While inflation prints rewards, deflation burns supply.

There'll be more of these explainers coming up. Let us know in the comments below if there are any blockchain terms that you may have come across but struggle to understand, and we'll help simplify them for you.

Stay tuned for more coming up!

We are shifting gears towards intermediate concepts by tackling common indicators used for trading and investments. These are common market indicators that you'll find in every trading platform and are extremely useful if you're looking at lines on the chart and trying to figure out what they mean. Understanding these pairs helps you spot trends, gauge volatility, and assess long-term value.

You see the bars going up and down, but do they represent money spent or money at risk?

Both metrics track "how much" is happening in the market, often leading traders to ignore one for the other. They both measure market liquidity and participation levels. However, the difference is the time period that's being covered.

• Volume: This indicator matches a cash register receipt. It tracks trades that have already happened and settled. You'll see this as green or red bars in most trading platforms.

  • Market Insight: Traders use volume to see if a price move is real to confirm the trend. A price spike with high volume means investors are actually buying. A price spike with low volume is often a "fake out" or a trap.
    

• Open Interest (OI): This indicator matches a poker table full of active bets. It tracks contracts that are currently open and not yet settled. You'll find this being used for derivatives or futures trading.

  • Market Insight: Rising open interest means more leverage is entering the system. High open interest often precedes a massive volatility spike, a liquidation cascade, or a "short squeeze."

The Takeaway: While volume confirms the past trend, open interest loads the spring for the future move.

All moving averages smooth out the noise. The difference is how fast they turn the wheel.

They are both technical indicators that smooth out price data and look like identical lines on a chart, but they give buy/sell signals at completely different times.

• SMA (Simple): Like a cruise ship, it turns slowly. It averages all prices in the period equally, giving no preference to yesterday over last month.

  • Market Insight: This indicator is used by long-term holders and investors to see the "true" trend without the noise of daily volatility. It is slow to react but reliable (e.g., the "Golden Cross" strategy).

• EMA (Exponential): Like a speedboat, it turns instantly. It applies a heavy weight to the most recent prices, reacting to new data immediately.

  • Market Insight: This indicator is commonly used by day traders to catch a trend reversal early or scalp short-term moves. It gets you in faster, but it also gives more "false alarms" than the SMA.

The Takeaway: Use SMA for the long journey; use EMA for the daily race.

"Tokenomics" usually boils down to whether the pie is getting bigger or the slices are getting scarcer. New investors tend to assume that all crypto has a fixed supply like Bitcoin. However, most don't.

These terms are both used to describe the supply mechanics and how the total number of coins/tokens changes over time. However, for better or worse, they could also create a long-term price impact on the tokens you're holding.

• Inflationary: Like a printing press. The protocol programmatically creates new coins to reward miners or stakers (e.g., Dogecoin).

  • Market Insight: Inflationary tokens are good for network security (paying the guards), but the price will struggle to go up unless buying demand outpaces the constant "printing" of new supply.

• Deflationary: Like a furnace. The protocol programmatically destroys (burns) a portion of existing coins (e.g., BNB or ETH post-merge).

  • Market Insight: Deflationary tokens would favour long-term holding. The scarcity automatically increases over time, theoretically driving the price up even if demand remains steady.

The Takeaway: While inflation prints rewards, deflation burns supply.

There'll be more of these explainers coming up. Let us know in the comments below if there are any blockchain terms that you may have come across but struggle to understand, and we'll help simplify them for you.

Stay tuned for more coming up!