Alongside the Cryptocurrency market cap, trading volume is another commonly used metric for traders to get an overall picture of the market. This concept plays an important role for traders in tracking crypto trading value. Here is the explanation of trading volume that you should not miss in Tokenize Exchange beginner’s guides.
What is trading volume?
Crypto trading volume is the buying and selling volume of a digital asset during a specific period which measures the number of individual units of a cryptocurrency changed hands during that period, usually over 24 hours. After the seller and the buyer agree on the transaction, it will be recorded by the exchange and be used to calculate the crypto trading volume.
Each cryptocurrency exchange shows its own trading volume. The data are reported updated throughout the current trading period. You can track the trading volume of each digital coin on Tokenize Xchange with a click on the Market. Remember that this data is not the overall volume of trade across the entire market. It is recommended to track the total cryptocurrency trading volume on CoinMarketCap by the last 24-hour, last 7-day, or last 30-day before making your investment decision.
>>>Read more: Investment guide: Cryptocurrency short and long position<<<
Why trading volume is important?
Many traders look for this global trading volume before making their shortlist for a further investment portfolio. So what makes the crypto trading volume an important metric?
The volume of the trade itself reveals the cryptocurrency’s recent volatility. A digital asset is expected to frequently experience heavy movements if it has a high trading volume. By contrast, a coin with low trading volume can be suspicious if it is suddenly highly traded or surges in price, citing that it can be manipulated by crypto sharks (large traders).
Overall, similar to market capitalization, the crypto trading volume is a functional tool for tracking signals and confirmation purposes. Moreover, it is a favorable indicator due to its objectivity and less likely to be manipulated. See you in the next article in the series Beginner’s guide with Tokenize Blog!
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