The principle of fundamentals of economics is that the value of something is directly proportional to the number of people eager to buy and sell it. Cryptocurrency follows the same rule. In the crypto market, the volume of trades is the most crucial element. If you want to enter the crypto trading world, you must know “what is higher high lower low volume,” the definition of crypto trading volume, and its importance.
In this article, let’s try to understand crypto trending volume’s core insight and significance.
What Is Crypto Trading Volume?
Cryptocurrency trading volume is the total amount of coins purchased and sold in a specific time frame. It usually measures a time frame of 24 hours. Crypto trading volume is essential for Investors to understand how active the market is for selling or buying a particular property in these hours. Moreover, they consider the entire volume of cryptocurrency transactions on all exchanges or a single sale to draw their conclusion.
What Is Higher High Lower Low Volume in Crypto?
If you’re new in the crypto market, you must know the meaning of volume indicator. Volume is a key indicator in technical analysis that helps verify established trends and patterns. It also reveals the total volume of stock transactions within that time frame. As volume leads you to stock price movement, it provides you with early warnings of price changes. So you should be aware of higher highs and lower lows volume in cryptocurrency.
Higher High Volume
High volume means many people are interested in purchasing and selling the stock.
In high volume, you can see two trends. One is an uptrend, and the other is a downtrend. An uptrend indicates a higher high rate of buying stocks. For a stock’s upward velocity to be maintained, it needs to see a rise in volume in parallel with the trend’s rise.
Similarly, if there is a rise in volume in parallel with the continued downtrend of the stock, the price will continue to go downward. It indicates the high rate of selling stocks.
Lower Lows Volume
Low volume means people don’t have an interest in stock anymore. You can see two scenarios, like higher high volume. One is volume drops, and the price of a stock rises. It suggests purchasers are losing interest, and the uptrend is about to reverse.
The second one is both stock and volume drop. If this happens, sellers have lost interest in the stock, and the downtrend is about to turn.
Importance of Cryptocurrency Trading Volume
As we discussed before, high-volume crypto is the safest investment for you. It increases your stability and liquidity. However, a lack of trading volumes is a warning sign that the currency may not have any future. If a cryptocurrency is not getting traction, an exchange may decide to delist it.
So, you need to examine your trading volume daily. You can do it in many ways to make a more accurate forecast on price.
- You may analyze volume data by looking at it over a seven-day, a 24-hour, or 30 days.
- Crypto will naturally get less attention when trade volume is high with big moves. However, unexpected heavy activity over 24 hours might imply that something or someone is moving a coin with a smaller trading volume.
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Now you may realize the importance of crypto trading volume. Analysts look at trade volumes, circulation supply, and market capitalization to find promising early-stage currencies. So if you want to keep your crypto volume high, keep an eye on exchanges of cryptocurrencies.