Glossary
What is volatility?
In one sentence
Volatility is how sharply and how often a price moves. Crypto is among the most volatile asset classes there is.
Volatility measures the size of price swings. High volatility means large moves in both directions over short periods, and it cuts both ways — the same property that produces dramatic gains produces dramatic losses.
Some concrete context. Major cryptocurrencies have fallen 70–90% from peak on multiple occasions and taken years to recover. Daily moves of 5–10% are unremarkable. Smaller coins routinely move far more than that, and some go to zero permanently.
The practical implication is about position sizing rather than prediction. If a 60% fall in your holding would force you to sell at the worst moment, or would affect your rent, the position is too large regardless of your view on the asset. Volatility is why the “only what you can afford to lose” rule is a mechanical constraint rather than a platitude.
For example
A 50% fall requires a 100% gain to get back to level — losses are asymmetric in that sense.