> For the complete documentation index, see [llms.txt](https://docs.bitfoot.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bitfoot.com/trading-guides/getting-started/understanding-market-basics.md).

# Understanding Market Basics

This section covers essential terms and concepts that help you navigate the crypto market with more confidence.

## **Key Market Concepts**

### **Market Cap and Liquidity**

Market cap indicates the total value of a token (price x supply), while liquidity shows the ease of buying and selling. A higher liquidity-to-market-cap ratio suggests a more stable token with less price manipulation risk.

### **Order Types**

Understand the difference between a **market order** (buys/sells immediately at the current price) and a **limit order** (buys/sells only when a specified price is met). Limit orders give you more control but may take longer to execute. You can set limit orders using the Bitfoot Limit Buy ([ETH](/bitfoot-bot/evm-trading/limit-buy.md), [SOL](/bitfoot-bot/solana-trading/limit-buy.md)) feature.

### **Support and Resistance**

These are price levels where a token often “bounces” up (support) or encounters difficulty rising further (resistance). Identifying these levels can help you set entry and exit points.

### **Volume and Trends**

High trading volume suggests strong interest in a token and can signal price stability. Trends (e.g., bull vs. bear markets) impact prices significantly; understanding them helps you trade in the direction of the market.