Cryptocurrency Trading Basics MCQs

50 Score: 0 Attempted: 0/50

1. : What does “crypto trading” primarily involve?
(A) Exchanging cryptocurrencies for goods
(B) Buying and selling cryptocurrencies for profit
(C) Mining cryptocurrencies using hardware
(D) Storing crypto in a cold wallet

2. : Which is the most commonly traded cryptocurrency pair?
(A) ETH/USDT
(B) BTC/USDT
(C) XRP/BTC
(D) LTC/USDT

3. : What does “spot trading” mean in crypto?
(A) Trading with borrowed funds
(B) Buying and selling instantly for settlement
(C) Long-term holding
(D) Using cold wallets for safety

4. : Which term refers to holding cryptocurrency for a long period?
(A) Swing Trading
(B) Day Trading
(C) HODL
(D) Arbitrage

5. : What does “P2P trading” stand for?
(A) Person to Place
(B) Peer to Peer
(C) Public to Private
(D) Price to Price

6. : Which exchange type allows direct peer-to-peer trading without intermediaries?
(A) Centralized Exchange (CEX)
(B) Decentralized Exchange (DEX)
(C) OTC Desk
(D) Futures Exchange

7. : In trading, what does “bullish” mean?
(A) Expecting price to fall
(B) Expecting price to rise
(C) No change in price
(D) Moving sideways

8. : Which order executes immediately at the current market price?
(A) Limit Order
(B) Market Order
(C) Stop Order
(D) Future Order

9. : A “limit order” means:
(A) Buying/selling at best available price
(B) Setting a specific price to execute trade
(C) Borrowing to trade
(D) Holding crypto for long term

10. : What does “liquidity” in trading refer to?
(A) Volatility in prices
(B) Availability of buyers and sellers
(C) Security of funds
(D) Cold wallet storage

11. : Which trading strategy involves entering and exiting trades within the same day?
(A) HODLing
(B) Day Trading
(C) Arbitrage
(D) Swing Trading

12. : What is “arbitrage trading”?
(A) Mining crypto with high speed
(B) Buying on one exchange and selling on another
(C) Holding crypto for long term
(D) Short selling in futures

13. : Which chart type is most common in crypto trading?
(A) Pie Chart
(B) Line Chart
(C) Candlestick Chart
(D) Bar Graph

14. : “Bearish” sentiment in crypto means?
(A) Expecting prices to rise
(B) Expecting prices to fall
(C) Prices remain stable
(D) Long-term holding

15. : Which indicator measures market volatility?
(A) RSI
(B) MACD
(C) Bollinger Bands
(D) Fibonacci Levels

16. : What is the main risk of margin trading?
(A) Limited profit
(B) Slow trade execution
(C) Liquidation due to leverage
(D) Reduced liquidity

17. : What is a “stop-loss order”?
(A) To lock profits when price rises
(B) To limit losses by setting a price exit
(C) To borrow funds for trading
(D) To trade only on weekends

18. : “Scalping” in trading means?
(A) Trading on long-term positions
(B) Taking small, frequent profits
(C) Investing in ICOs
(D) Buying NFTs

19. : Which factor often drives crypto trading volume the most?
(A) Mining difficulty
(B) Market news and sentiment
(C) Cold wallet usage
(D) Token burning

20. : What does “ATH” stand for in trading?
(A) Average Trade Holdings
(B) All-Time High
(C) Arbitrary Trade Halt
(D) Annual Trading History

21. : In crypto trading, “FOMO” means?
(A) Fear of Missing Out
(B) Future of Market Options
(C) Fund Over Market Order
(D) Final Order Market Offer

22. : Which factor increases liquidity in a trading pair?
(A) More buyers and sellers
(B) Low trading volume
(C) Price volatility
(D) Mining activity

23. : Futures trading allows traders to:
(A) Store assets safely offline
(B) Buy crypto instantly
(C) Bet on future price movements
(D) Exchange goods for crypto

24. : What does “short selling” in crypto mean?
(A) Selling at a loss
(B) Borrowing and selling crypto to buy back cheaper
(C) Selling small amounts of crypto
(D) Quick spot trading

25. : “Leverage” in crypto trading means?
(A) Using cold storage for safety
(B) Trading with borrowed capital
(C) Holding long-term
(D) Reducing portfolio risk

26. : Which risk is most associated with crypto trading?
(A) Price volatility
(B) Hardware failure
(C) Mining difficulty
(D) Limited storage

27. : Which tool is often used to analyze crypto price movements?
(A) Technical Analysis
(B) Wallet recovery
(C) Cold storage
(D) Mining rigs

28. : RSI is commonly used to identify:
(A) Overbought and oversold conditions
(B) Transaction speed
(C) Liquidity depth
(D) Block confirmation times

29. : “Whales” in crypto trading are:
(A) Large long-term miners
(B) Traders holding large amounts of crypto
(C) DEX owners
(D) Exchange regulators

30. : A “pump and dump” scheme means?
(A) Mining at low cost then selling
(B) Artificially inflating price and selling off
(C) Trading based on news
(D) Holding coins for long-term growth

31. : Which is considered the safest trading approach for beginners?
(A) Margin trading with leverage
(B) Long-term HODLing
(C) Futures trading
(D) Arbitrage

32. : What is the role of a “trading pair”?
(A) To mine crypto faster
(B) To exchange one currency for another
(C) To store assets securely
(D) To analyze price charts

33. : Which type of exchange generally offers higher liquidity?
(A) DEX
(B) OTC desk
(C) CEX
(D) Wallet

34. : Which order executes only when a specified price is reached?
(A) Market Order
(B) Limit Order
(C) Spot Order
(D) Arbitrage Order

35. : “Slippage” in trading means?
(A) Transaction being canceled
(B) Difference between expected and actual execution price
(C) Buying at a discount
(D) Mining difficulty increasing

36. : What is the main advantage of DEX over CEX?
(A) Faster withdrawals
(B) Higher security and control of funds
(C) Lower price volatility
(D) Mining rewards

37. : Which factor does NOT directly impact crypto trading?
(A) Market demand
(B) Global regulations
(C) Blockchain halving events
(D) Keyboard type used by trader

38. : What does “Fiat-to-Crypto trading” mean?
(A) Exchanging one crypto for another
(B) Exchanging government currency for crypto
(C) Selling crypto for NFTs
(D) Peer-to-peer crypto mining

39. : Which is the main benefit of liquidity pools in DEX trading?
(A) Instant mining rewards
(B) Smoother and faster trade execution
(C) Reduced government regulations
(D) High volatility

40. : Which trading type involves contracts without owning the underlying asset?
(A) Spot Trading
(B) Futures Trading
(C) P2P Trading
(D) Arbitrage

41. : Which of these is considered a high-risk trading style?
(A) Scalping
(B) Arbitrage
(C) Long-term holding
(D) Spot trading

42. : In crypto, “diversification” helps reduce:
(A) Transaction speed
(B) Trading fees
(C) Risk exposure
(D) Mining power

43. : Which of the following is NOT a trading order type?
(A) Market Order
(B) Limit Order
(C) Stop-Loss Order
(D) Stake Order

44. : Which chart pattern indicates possible reversal in trading?
(A) Head and Shoulders
(B) Linear Regression
(C) RSI Levels
(D) Bollinger Bands

45. : What is the purpose of “take-profit order”?
(A) To prevent market crashes
(B) To automatically sell when a target price is reached
(C) To stop losses at low price
(D) To increase leverage

46. : Which global event often increases crypto trading activity?
(A) Holidays
(B) Economic uncertainty
(C) Sports tournaments
(D) Lunar eclipse

47. : A trader who expects prices to rise would most likely:
(A) Open a short position
(B) Open a long position
(C) Exit the market completely
(D) Hold stablecoins only

48. : What is the main purpose of “trading volume” indicator?
(A) Show transaction speed
(B) Indicate market activity strength
(C) Reduce slippage
(D) Stop arbitrage

49. : Which is the biggest risk of trading on CEX?
(A) Exchange hacks or custodial risks
(B) Slow transactions
(C) Too many buyers
(D) Lack of trading pairs

50. : A “trading bot” in crypto is used for?
(A) Mining at high speed
(B) Automating trading strategies
(C) Creating wallets
(D) Cold storage backups

Leave a Comment Cancel reply