What Is Crypto Trading Volume
Admin
Aug 27, 2021
The world of cryptocurrency trading is equal parts exciting and exhilarating. The crypto trading world has grown to become a mainstream force of the financial future.
Before beginning your crypto trading journey, it’s important to understand key terminology. Today, we’re delving into the important concept of crypto trading volume.
Cryptocurrency Market Caps
Before we understand crypto trading volume, we must understand crypto supply. We’ve explained before how cryptocurrency market caps influence the crypto market. Cryptocurrency market caps are closely linked to the supply of crypto, as spread across the markets.
Cryptocurrency circulating supply market cap: This is the total amount of a particular cryptocurrency currently in circulation, at a particular point in time.
Cryptocurrency fully diluted supply market cap: This is the maximum amount of a particular cryptocurrency that will eventually be in circulation. In the case of Bitcoin, only 21 million Bitcoin will ever exist.
What is a Crypto Trading Volume?
With these definitions in mind, a crypto trading volume is:
A measure of trading activity: In this case, it measures activity that takes place around a coin, token, or other digital asset.
Linked to a particular time period: For example, a crypto trading volume is usually calculated in terms of a day, month, or year. A crypto trading volume, as displayed on an exchange is most often shown as a reflection of trading activities over the past 24 hours.
Often different across different exchanges: The trading volume of a particular coin may be higher on one exchange, but lower on the other. That’s why it’s important to check on the general crypto trading volume too, and not just what you see on your chosen exchange in one day.
An insightful tool: This metric helps you understand how much buying and selling of that coin, token, or digital asset, has taken place.
Useful to know: It helps you plan your trading activities.
Why is a Crypto Trading Volume Important?
It’s important to monitor crypto trading volume, as a metric for better understanding your next trading move. Crypto trading volume helps you:
Plan your next trade: Checking on a crypto’s trading volume can help you decide when to buy it, and when to sell it.
Understand trading trends: Monitoring a crypto trading volume and carefully noting its price movements can help you understand what to expect next.
Manage your risk: Trading markets can become volatile places. Higher or lower crypto trading volumes can help you protect against losing out while trading. For example, when a high crypto trading volume is seen during a price move, this usually means the price move is more important to consider when planning your trading activities.
Check on a particular asset’s history: Scrolling out to see a crypto trading volume over a set period of time will help you make trading choices with even more confidence.
MEX Digital has all the tools you need to not only see the volume traded on each asset, but also can assure you our valued customers the highest volumes in the industry so your trading experience is of the highest standard! Sign up to our mailing list on the home page of mexdigital.com and be informed when we launch!
