Certain exchanges in finance: whether legacy markets like FOREX and stocks, or cryptocurrency markets like bitcoin and litecoin, offer a fee structure called the maker/taker model. It's pretty simple how it works:
 The recent trend downward is being blamed by traders on numerous factors. Lately, it's chique to point to news articles that are promoting Fear Uncertainty and Doubt (FUD) and blame that for the negative market sentiment.
It's difficult to say how Bitcoin markets respond to news. During the turmoil in Cyprus and the Greek economic crisis, bitcoin was incredibly volatile. When a correlation this strong is observed, it's hard to discount it. But often times good news leads to price declines, or bad news leads to price increases, or the market just doesn't respond at all to news. A question I get a lot from people is: there are so many bitcoin exchanges out there, which ones matter in terms of leading price changes?
The short answer is: China. The long answer is, well, it's complicated. After the bubble up to over 1,000 in 2013 which was largely caused by Chinese adoption (not Mt Gox fake volume as you may hear from others), the Chinese exchanges have played a central role in price movements.
The USD exchanges have a useful index from Tradeblock called the XBX Index, a proprietary weighting of the major exchanges based not just on last price but on orderbook thickness and other components. Watching the CNY markets is essential if you are going to be daytrading bitcoin, but the USD exchanges are gaining influence. 2015 has been a remarkable year compared to 2014 in terms of services available. And 2014 was amazing compared to 2013, which was amazing compared to 2012. You get the point. The future is bright for bitcoin services. You may encounter a lot of new lingo and terminology when you begin to learn about Bitcoin futures or markets trading in general. If you have previous experience in stock trading, the culture and attitudes are very similar. The charting terminology is mostly the same too. There are, however, some unique characteristics of the bitcoin community which make bitcoin traders a unique breed. Here is a little guide to some of the words you will come across and be puzzled about:
FOMO: noun, adjective, verb. Fear Of Missing Out. This describes the psychology of many traders who see price move in a certain direction and are overcome with a feeling of missing out, which compels them to "FOMO LONG" or "FOMO SHORT", or even sometimes "FOMO ALL-IN". Hodl: These are the bagholders of bitcoin. Those who choose to persistently hold coins despite market volatility. They refuse to sell when it's obvious to sell. They refuse to capitulate! Hodl! Hopium: That lovely feeling that the price will just keep going up and up and up. Permabulls often overdose on hopium and get rekt. Rekt: When your position is going against you. Margin called. Liquidated. Losses stacking up. Hope slowly draining away. Volumyzer: The Chinese exchanges are well known to manipulate volume, using their 0% fee model which encourages wash trading. In times of relative market calm, traders can see large volume bars erecting on Houbi and OKCoin, indicating severe shenanigans at play. |
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