Base Currency
The base currency is the first asset in a trading pair and represents the asset being priced in units of the quote currency.
✦ Key Insight
Understanding the term helps readers interpret trading interfaces and market data and recognize how execution and risk can change.
✕ Common Misconceptions
Definitions and calculations can vary by venue. Do not treat one indicator or market signal as a guaranteed prediction.
Detailed Explanation
In Practice
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Liquidity
Liquidity describes how easily an asset can be bought or sold in meaningful size without causing a large change in price.
Order book
An order book is a list of open buy and sell orders arranged by price on a trading venue.
Trading Pair
A trading pair represents two assets that can be exchanged against each other on a market, such as BTC/USDT.
Volatility
Volatility measures the magnitude and frequency of price changes in an asset or market over time.