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The cryptocurrency market has grown exponentially. Trading, with a wide range of cryptocurrencies available for trading a crucial aspect that is often overlooked is the trading volume. Cryptocurrency markets.
What is trading volume?
The trading volume refers to the total amount of money changed between buyers and sellers in a certain period. Represents the large number of transactions that took place on the market of an asset. In the context of cryptocurrencies, trading volumes are usually
Why is the trading volume for market feeling important?
The trading volume has appeared as a key indicator of market feeling in recent years. Here are some reasons why:
- Volatility : High trading volumes often indicate increased market volatility. When investors are more active and willing to trade, prices tend to fluctuate faster.
- Sentimelic indicators : The trading volume can be used to give the general feeling of a market. Asset buyers’ prospects, while a low volume may indicate caution or denial feeling.
- Price discovery
: Trading volumes play a crucial role in discovering prices. Following the trading volumes, traders can understand perspectives on the expectations and preferences of the market participants for certain assets.
- Risk tolerance : Larger trading volumes often match more speculative transactions, which may indicate that investors take over.
Key factors that influence trading volume
A few factors can affect the trading volume on cryptocurrency markets:
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- Command flow :
Analysis of trading volume data
Traders and analysts can use various techniques:
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Conclusion
The trading volume is a crucial aspect of market -feeling assessment on cryptocurrency markets. By monitoring trading volumes, traders and analysts can obtain information about the general direction of the market, risk tolerance and expectations. While trading volume data
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