Тrading volume refers to the total number of shares (or tokens/coins) that have been exchanged between buyers and sellers of a given asset during trading hours of a certain day.
What Is Trading Volume?
Why Is Trading Volume Important?
A greater volume of cryptocurrency transactions leads to fair cryptocurrency prices and removes the chance of distorted pricing. A low cryptocurrency exchange volume signals inefficient or low trades, as the asking prices of sellers fail to meet the bids of potential buyers.
What Is the Difference Between Trading Volume and Liquidity?
Usually, the higher the volume of cryptocurrency transactions, the more liquid the crypto market will be.
What Are Common Crypto Trading Volume Indicators?
Moving average of Volume (MAV): Helps to identify the overall trend of the trading volume.
Volume-weighted Average Price (VWAP): Measures the average price of a security based on the trading volume.
Volume-based Oscillators: Measure the changes in trading volume over a given period of time. Examples include On-Balance Volume (OBV) and Chaikin Money Flow (CMF).
Accumulation/distribution Indicator: Compares the closing price of a security to its trading range over a given period of time.
Volume Bars: dDsplays the volume of trading activity over a given period of time.
How Does Trading Volume Affect Cryptocurrency Price?
Trading volume is one of the most important indicators of cryptocurrency price movements. As the volume of trade increases, the price of cryptocurrency tends to increase. This is because more people are buying and selling the cryptocurrency, creating a higher demand and pushing the price up. However, it is important to note that higher trading volumes do not necessarily mean that the price of the cryptocurrency will go up. It could also indicate speculation and market manipulation.