How to evaluate the trading volume for market trends in cryptocurrency
The cryptocurrency has become a dominant force on the financial markets, many investors and dealers who deal with it in search of major yields. While some cryptocurrencies regard as a class of speculative assets, others see them as a legitimate investment vehicle. A key factor that can influence the direction of the cryptocurrency markets is the trading volume – how many people buy or sell the currency. In this article we will examine how the trading volume for market trends is evaluated in cryptocurrency.
What does trading volume mean?
The trading volume refers to the total value of the transactions of a currency over a certain period of time. It represents the frequency when a cryptocurrency was bought and sold on various exchanges, including those of governments and self -regulatory organizations (such as Binance). A higher trading volume can indicate a strong demand for a certain currency, while a smaller volume indicates a weak purchase or sales activity.
How to evaluate the trading volume
The evaluation of the commercial volume is important when an attempt is made to identify the market trends in cryptocurrency. Here is a step -Sy -step guide as possible:
- Select the correct data sources : Use renowned and API exchanges (application programming interfaces) that offer precise and updated trading volumes. Some popular options are:
* Coinmarketcap: A cryptocurrency data database.
* TradingView: A popular platform for the Real -Time market analysis.
- Select the right time area : Determine whether you use short -term or long -term data to evaluate market trends. Short-term data (e.g. 1-5 minutes) can help you identify fast price fluctuations, while long-term data (e.g. daily, weekly) provide information about wider market movements.
- Identify key currencies with high trade volumes : Concentrate on cryptocurrencies with a significant trading volume such as Bitcoin, Ethereum and Litecoin. These coins were popular among dealers due to their relative stability and liquidity.
- Analyze the price and volume relationships : Look for correlations between price changes and trading volumes. A strong opposite relationship (for example, when prices fall, the volume can indicate an ugly trend, while a positive correlation may indicate an increase.
Analysis of trading volume
Follow these steps to identify market trends in cryptocurrency using the commercial volume analysis:
- Create graphic
: Plush of the price and trade volume of the cryptocurrency over time in separate diagrams.
- Search for consolidation models : Identify areas with a high trading volume that are surrounded by low or no activity times.
- Check the level of support and resistance : Look for areas in which the commercial volumes are usually higher (e.g. via key levels such as $ x, y) as potential support zones, while areas can serve as resistors under these points.
V.
monitors to price movements in relation to significant events : Follow the most important communication, partnerships or changes to the state regulations that can affect cryptocurrency prices and commercial activities.
Popular cryptocurrest with a high trade volume
Some cryptocurrencies with remarkable high trade volumes are:
- Bitcoin (BTC)
- Ethereum (et)
- Litecoin (LTC)
Diploma
The evaluation of the trading volume for market trends in cryptocurrency is a crucial step to determine potential purchase or sales opportunities. By analyzing the relationships between price changes and trading volume, you receive valuable information in the direction of the cryptocurrency markets. Remember to always make your own research, set clear investment goals and never invest more than you can afford to lose.
Additional tips
- Pay attention to the feeling of the market through social networks, online forums and news points.
