Introduction
Crypto trading always happens in pairs. You exchange one currency for another — for example, trading Bitcoin for U.S. dollars or Ether for Bitcoin. Understanding how these pairs are quoted and what they mean is essential before placing a trade.
Base Currency vs. Quote Currency
Every trading pair is written as two ticker symbols separated by a slash — for example, BTC/USD or ETH/BTC. The first currency is called the base currency. It’s the asset you are buying or selling. The second is the quote currency, which tells you how much of that currency you need to buy one unit of the base currency. In foreign exchange markets, this format is standard; the base currency appears first and the quote currency second【933224771719519†L284-L340】.
For instance, in the CAD/USD pair, the Canadian dollar is the base currency and the U.S. dollar is the quote currency. If the pair is quoted at 1.25, it means it costs 1.25 USD to buy one Canadian dollar. If the quote moves higher, the base currency is strengthening relative to the quote currency【933224771719519†L320-L344】.
Major and Minor Pairs
On cryptocurrency exchanges, some pairs trade with higher liquidity than others. Pairs that include widely used fiat currencies such as U.S. dollars, euros or Japanese yen — for example, BTC/USD or ETH/EUR — are known as major pairs. These markets tend to have tighter spreads and deeper order books because more traders participate. Pairs that involve less‑traded fiat currencies or two cryptocurrencies (such as ADA/BTC) are called minor pairs. They can be more volatile, and the bid–ask spread may be wider.
Common currency codes you’ll encounter include USD for U.S. dollars, EUR for euros, JPY for Japanese yen, GBP for British pounds, CNY for Chinese renminbi, AUD for Australian dollars, CAD for Canadian dollars and CHF for Swiss francs【933224771719519†L308-L319】. Knowing these abbreviations will help you quickly interpret any trading pair.
How to Read a Trading Pair
Reading a trading pair involves understanding the quoted exchange rate. If you see EUR/USD = 1.55, it means that one euro costs 1.55 USD【933224771719519†L355-L365】. Traders buy a pair when they think the base currency will rise relative to the quote currency, and sell the pair when they expect the base currency to weaken【933224771719519†L343-L346】.
Crypto exchanges also list pairs without a slash, such as ETHBTC. The convention remains the same: the first currency (ETH) is the base currency, and the second (BTC) is the quote currency. Make sure to confirm which asset you are buying and which one you are using to pay.
Choosing Which Pair to Trade
When selecting a trading pair, consider your base currency. If your account is funded with U.S. dollars, major USD pairs like BTC/USD or ETH/USD will usually have the most liquidity. Also pay attention to volatility and fees: minor pairs can move sharply, which presents opportunity and risk. Some exchanges offer cross‑crypto pairs (such as SOL/ETH) that allow you to trade altcoins directly without converting back to fiat first. Understanding liquidity and your risk tolerance will help you select the right pair for your strategy.
Conclusion
Mastering the basics of trading pairs is a foundation for any crypto trader. By knowing which currency is the base and which is the quote, understanding how pairs are quoted and being aware of major versus minor markets, you can make more informed trading decisions. Always do your research before entering a trade and remember that markets can be volatile. Managing risk and staying informed will serve you well as you navigate the world of cryptocurrency markets.
For a primer on how to apply technical indicators like moving averages, MACD and RSI, check out our Technical Analysis for Crypto Traders article.