- Terms are grouped by what they measure: trend, momentum, volume and flow, levels, market structure, volatility and risk, macro.
- Every indicator answers one question. Good analysis combines answers to several questions, on several timeframes.
Technical analysis has its own vocabulary, and crypto adds a few words of its own. This glossary defines the terms you will meet most often in charts, research and analysis tools, including every measure that EDGE calculates. Definitions describe what each tool measures and how traders typically read it; none of them is a trading signal on its own.
Trend
Trend
The prevailing direction of price over a given timeframe. A trend on the daily chart can coexist with an opposite move on the 1-hour chart, which is why traders state the timeframe whenever they describe a trend.
Moving average (MA)
The average closing price over a set number of periods, plotted as a line that smooths out noise. It shows direction and acts as a dynamic support or resistance.
EMA (exponential moving average)
A moving average that gives more weight to recent prices, so it reacts faster than a simple average. The 20, 50 and 200-period EMAs are the most widely watched.
EMA stack
The order of several EMAs relative to each other. A bullish stack (price above EMA 20, above EMA 50, above EMA 200) describes a healthy uptrend; the reverse order describes a downtrend; a tangled stack describes a range or transition.
ADX (Average Directional Index)
Measures trend strength on a 0–100 scale, regardless of direction. Readings above about 25 usually indicate a trending market; below about 20, a weak trend or range.
Ichimoku Cloud
A Japanese indicator system that combines several averages into a "cloud" showing trend, momentum and support or resistance at once. Price above the cloud is read as bullish, below it as bearish, inside it as undecided.
Momentum
Momentum
The speed of price change. Momentum often weakens before trend reverses, which makes it useful as an early warning.
RSI (Relative Strength Index)
An oscillator from 0 to 100 that compares the size of recent gains and losses, usually over 14 periods. Readings above 70 are conventionally called overbought and below 30 oversold, though in strong trends RSI can stay at extremes for a long time.
MACD (Moving Average Convergence Divergence)
The difference between a fast and a slow EMA (commonly 12 and 26 periods), with a signal line and a histogram. A rising histogram shows strengthening momentum in the trend's direction; a shrinking one shows fading momentum.
Overbought and oversold
Conditions where price has moved far and fast in one direction according to an oscillator such as RSI. They describe stretch, not a reversal: overbought markets can keep rising.
Divergence
A disagreement between price and an indicator. A bearish divergence occurs when price makes a higher high but RSI or OBV makes a lower high, suggesting weakening participation; a bullish divergence is the mirror image.
Volume and order flow
Volume
The amount of an asset traded in a period. Moves on rising volume carry more conviction than moves on falling volume.
OBV (On-Balance Volume)
A running total that adds volume on up-closes and subtracts it on down-closes. It shows whether volume is flowing into or out of an asset and is often used to spot divergences.
CVD (Cumulative Volume Delta)
The running difference between volume executed by aggressive buyers (market buy orders) and aggressive sellers (market sell orders). Rising CVD shows buyers taking the initiative; falling CVD shows sellers in control.
Taker and maker
A taker submits an order that executes immediately against existing orders; a maker places an order that waits in the order book. CVD is built from taker activity.
Levels and volume profile
Support
A price area where declines have repeatedly stopped because buying interest appeared. See the support and resistance guide.
Resistance
A price area where advances have repeatedly stopped because selling interest appeared.
Breakout and false breakout
A breakout is a move beyond a level that holds, ideally confirmed by a close and a retest. A false breakout moves beyond the level briefly and then returns inside the prior range.
Role reversal
The tendency of broken support to act as resistance, and of broken resistance to act as support.
Volume profile
A histogram showing how much volume traded at each price over a period, rather than at each time. It reveals the prices the market accepted and the ones it passed through quickly.
POC (point of control)
The price with the highest traded volume in a volume profile. Price is often drawn back to it.
VAH and VAL (value area high and low)
The upper and lower bounds of the value area — the price range containing about 70% of the period's volume. Trading above VAH or below VAL means price has left accepted value.
PDH, PDL, PWH, PWL, PMH, PML
The previous day's high and low, the previous week's high and low, and the previous month's high and low. They act as reference levels in a market without a session close.
Confluence
Several independent tools pointing to the same price area — for example a prior swing high that coincides with VAH and a round number. Confluence makes a level more significant.
Market structure
Market structure
The pattern of swing highs and lows that defines trend without any indicator.
HH and HL (higher high, higher low)
Each peak above the previous one and each trough above the previous one. This sequence defines an uptrend.
LH and LL (lower high, lower low)
Each peak below the previous one and each trough below the previous one. This sequence defines a downtrend.
Break of structure
The first time price violates the prevailing sequence — for example, a lower low in an uptrend. It is an early sign that trend may be changing.
Timeframe
The period each candle represents, such as 5M (five minutes), 1H, 4H or 1D (one day). Higher timeframes define context; lower timeframes refine timing.
Multi-timeframe analysis
Reading the same asset on several timeframes to see whether they agree. A 1H buy signal against a 1D downtrend is a lower-quality setup than one aligned with it. See the multi-timeframe guide.
Regime
The type of market currently in force: trending or ranging, risk-on or risk-off, calm or volatile. Many tools work in one regime and fail in another.
Volatility and risk
Volatility
How much price moves. Realized volatility measures movement that has already happened; it changes sharply around major events.
ATR (Average True Range)
The average size of a candle's full range, including gaps, over a set number of periods (commonly 14). ATR as a percentage of price shows how far an asset normally moves and helps set stop distances.
Stop-loss
A predefined price at which a losing position is closed. It should sit where the trade idea is proven wrong, not at an arbitrary percentage.
Invalidation
The price or condition that proves a scenario wrong. Defining it before entry is the core of disciplined trading.
Position sizing
Choosing how much to trade so that the loss at the stop equals an acceptable share of the account.
R-multiple
A trade's result expressed in units of initial risk (R). If you risk $100 and make $250, the trade returned 2.5R; if you lose the full $100, it returned −1R.
Expectancy
The average result per trade across many trades: (win rate × average win) − (loss rate × average loss). A positive expectancy is the statistical edge a trading approach needs; see trading with scenarios.
Liquidation
The forced closing of a leveraged position when losses consume its margin. Clusters of liquidations can accelerate moves through obvious levels.
Funding rate
Periodic payments between long and short holders of perpetual futures that keep the contract price close to spot. Persistently high positive funding shows crowded long positioning.
Macro
Macro context
The economic and cross-market backdrop — interest rates, the dollar, risk appetite, scheduled data — that influences all risk assets, including crypto.
DXY (US Dollar Index)
The value of the US dollar against a basket of major currencies. A strengthening dollar has often coincided with pressure on crypto, and a weakening dollar with support.
VIX
The CBOE Volatility Index, derived from S&P 500 options and often called the market's fear gauge. Readings above about 20 indicate elevated stress in equity markets.
10-year Treasury yield
The yield on 10-year US government bonds, a benchmark for the cost of money. Rising yields tighten financial conditions for risk assets.
FOMC
The Federal Open Market Committee, which sets US interest rates eight times a year. Its decisions produced the largest crypto reactions in our study of 167 macro releases.
CPI (Consumer Price Index)
The monthly US measure of consumer inflation, published by the Bureau of Labor Statistics. It is one of the three releases that move crypto most.
NFP (Nonfarm Payrolls)
The monthly US jobs report, showing how many jobs the economy added. Along with FOMC and CPI, it is among the strongest scheduled drivers of crypto volatility.
PCE and PPI
PCE is the personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge; PPI measures prices received by producers. Both move crypto less than CPI.
Risk-on and risk-off
Market states in which investors favour growth and speculative assets (risk-on) or retreat to safety (risk-off). Crypto has generally traded as a risk-on asset.
Putting the terms to work
Each term above answers one question: where is the trend, how strong is it, who is in control of flow, where are the levels, how far can price move, and what in the macro backdrop could change the picture. EDGE computes these measures with algorithms on exchange data across 5M, 1H, 4H and 1D, adds macro context and the day's calendar, and uses AI to assemble them into a single plain-English brief — so the vocabulary turns into one coherent read rather than forty separate numbers.
See the whole picture before you trade.
EDGE computes the technical picture from exchange data across 5M, 1H, 4H and 1D, adds macro context and the day's economic calendar, then AI assembles every signal into one plain-English brief with levels and scenarios.
Frequently asked questions
What are the most important technical indicators for crypto?
Most crypto traders combine a trend measure (EMA 20/50/200, ADX), a momentum measure (RSI, MACD), a volume or flow measure (OBV, CVD, volume profile) and a volatility measure (ATR). No single indicator is enough; their value comes from agreement or conflict between them, ideally across several timeframes.
What is the difference between RSI and MACD?
RSI measures the speed and size of recent price changes on a 0–100 scale and is used to judge overbought or oversold conditions and divergences. MACD measures the gap between two exponential moving averages and is used to judge trend momentum and its shifts. RSI is bounded; MACD is not.
What does HH and HL mean in trading?
HH means higher high and HL means higher low. A sequence of higher highs and higher lows defines an uptrend; lower highs (LH) and lower lows (LL) define a downtrend.
What is POC in crypto trading?
POC, or point of control, is the price at which the most volume traded over a chosen period. It is a key level in volume profile analysis because price often returns to it or reacts around it.
What is expectancy in trading?
Expectancy is the average result per trade over a series of trades: win rate times average win, minus loss rate times average loss. A positive expectancy means the approach earns on average over many trades, even if many individual trades lose.