Volatility
The degree of variation in an asset’s price over time; higher volatility implies larger and more frequent price swings.
Volatility measures how much and how quickly price moves. Crypto markets are known for high volatility due to 24/7 trading, fragmented liquidity, leverage, and speculative flows.
"A token that swings ±15% within hours exhibits higher volatility than one that moves ±2% in the same period."
Common measures include standard deviation of returns, ATR, and implied volatility from options markets.
"Options implied volatility rose ahead of a major upgrade, signaling traders expected bigger price moves."
Related Terms
Liquidity
→The ease with which a crypto asset can be bought or sold without affecting the market price.
Leverage
→Leverage uses borrowed funds to increase position size, amplifying both gains and losses.
Liquidation
→Liquidation is the forced closure of a leveraged position when collateral is insufficient to cover losses, protecting the exchange or lenders.
Bear Market
→A prolonged period of declining prices and negative sentiment.
All terms and definitions may update as the Cryptionary improves.
