Importance of the quantity of trade in valuation of market trends
The cryptocurrency stormed the world, goes up with value and collapses at a rapid pace. While the market continues to float, merchants and investors strive to make well -founded decisions that the coins are increasing or decreasing. Commercial volume is often ignored when evaluating market trends.
In this article, we examine the importance of negotiating volume in defining market trends and how to use it as a valuable tool in cryptocurrency investments.
What is trading quantity?
The negotiation volume indicates that the total number of units is replaced or replaced by platform for a given period. This is a key indicator that provides information on the level of interest and participation in a particular cryptocurrency or activity class.
Why is trading quantity important for market trends?
- Confirmation Distortion : If the volume of negotiations is high, it may be tempting to ignore the lowest volumes to justify market volatility. However, this approach can lead to reinforcing prejudices, in which merchants are more likely to interpret price movements, which indicate a strong trend when it is simply the result of greater liquidity.
- excessive excessive : On the contrary, some investors are too overly visible in commerce. The reason for this is that the lowest volumes may indicate that the market is not as liquid or attractive to merchants that make them completely rejected.
- Identification of quantity and trend : It is more likely to confirm high trading volume than the lowest volume. When prices move in one direction, large quantities can be considered as a confirmation of strong support, while low volume may indicate resistance.
How to Trading Volume Inform the Market Trends
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2 This can lead to higher price movements or confirm existing trends.
3 For example, if the high increase in quantity leads to price movement, this may indicate that the market is ready for further growth.
The popular cryptocurrencies and their commercial volumes
- Bitcoin (BTC) : High negotiation volume, replacing more than 500 million units per day.
2.
- Litecoin (LTC) : Low negotiation volume with less than 50 million units daily.
Conclusion
In summary, negotiating quantity is a basic factor that should be taken into account when evaluating market trends in the cryptocurrency. By analyzing the level of interest and participation in stock markets or platforms, merchants can better understand the feeling of the market and make more well -founded decisions from which the coins grow or decrease.
Although high trading volume can be a sign of strong support or trust, this does not always indicate the trend. On the contrary, the low amount may indicate resistance or caution. When combining the amount of trade with other technical indicators and basic analyzes, merchants can take a more complete picture of market sensation and make more well -founded investment decisions.
Remember
- Trading volume must be taken into account with other factors such as price management, technical indicators and basic analyzes.
- Market tenders are not placed in stone and negotiating quantities may change over time.
- Be careful about the variations of the volume of negotiations and adaps the investment strategy accordingly.