Thus, it will likely keep going up. High Trading Volumes on Bitcoin Exchanges If you are looking for exchanging larger amount of bitcoin checking the trading volumes is crucial. Cryptocurrency trading volume definition Trading volume is the amount of activity that is surrounding a coin or a token.
A New Trend?
The Bitcoin futures exchange Bakkt just hit an all-time high in traded contracts. In the past week, Bakkt was thought to be struggling. After all, its volume significantly tapered off as BeInCrypto previously reported. Doez, it looks like the exchange is now rebounding in trading volume. Just a day before, the exchange posted an abysmal 25 BTC of daily traded volume, the lowest ever recorded on the exchange. Follow BakktBot for realtime updates.
What does high trading volume mean?
In many areas of life, size often impacts the outcome of an event: a large bus, for example, will inflict more significant damage on a brick wall than a go-kart. Similarly, volume impacts cryptocurrency trading. Trading volume usually can be seen as the bottom vertical bars on price charts. Since these charts are often specific to just one exchange, however, one might also visit exchanges data aggregators such as CoinMarketCap to see the overall asset trading volume numbers, as exchanges can noticeably vary in volume, depending on the exchange. High trading volume can mean significant money flow and interest in a given asset.
Divergence
Is the relationship between the volume and price direct? But when we look at the volume figures, the uptrend gets a bit steeper. To make sure we have a somewhat close ratio between the two indicators, we can use data from Bitcoinity :. If we talk about the daily volume expressed in the number of Bitcoins traded, then we can see a different picture.
As we can see, in the last six months, the BTC volume actually peaked in September rather than December, when its price hit the record high. There is some volatility in the BTC volume, but the indicator moves in a sideways trend.
Now here is the surprise, if we check the BTC volume on a two-year chartthen we get something like this:. No — this is not a mistake, the volume in terms of Bitcoins traded was much lower in than in the previous year.
Because the price for one Bitcoin starts to increase sharply, so fewer and fewer traders can allow spending on it, while the volume expressed in US dollars begins to rise together with the price, as shown in the first chart. What does trade volume mean in bitcoin the market moved out of China, the BTC volume dramatically fell, but the price showed an astonishing rally, pulling up the volume expressed in USD. There are several factors that have supported the Bitcoin trading volume in terms of US dollars.
Here are a few of them:. A higher Bitcoin price and higher trading volume might be great for crypto investors that are thirsty for profits, but the increasing volume became a burden for several large crypto exchanges. Binance, Bitfinex, and Bittrex are few of the exchanges that were forced to limit and even block the access to new users as the Bitcoin and crypto trading volume hit new highs. Besides Bitcoin, cryptocoins like Cardano or Tron were demonstrating impressive rallies as well, putting pressure on the exchanges that operated with.
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how What does trade volume mean in bitcoin work and whether you can afford to take the high risk of losing your money. Anatol is a cryptocurrency and blockchain enthusiast who loves to dissect complex topics and present them in an easy-reading format.
As a financial writer with several years of experience, he rapidly switched to the cryptocurrency boom, as he could anticipate that this industry might be the future of finance. Currently, he writes for Cryptovest, a leading crypto-news platform. With a previous focus on general finance topics, his articles reached highly regarded portals, such as SeekingAlpha, TheStreet, and Yahoo Finance.
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When a buyer or seller places a limit order, the exchange adds it to its order book until the price is matched by another trader roes the opposite end of the transaction. Read more about Asim Ahmad, founder of Eterna Capital — a blockchain investment firm, said even the largest exchanges doew be trusted to report accurate trading volumes. Fake-outs and false signals or break-outs do occur. High trading volume can mean significant money flow and interest in a given asset. The maker is who adds liquidity to the exchange, and a taker is what does trade volume mean in bitcoin one who removes it. Traders like Rager, however, believe bitcoin is a rarity among cryptocurrencies in that its market has real liquidity. From Wikipedia, the free encyclopedia. Coppock curve Ulcer index. Professional traders and chartists use volume to great advantage, following the mantra that if the price falls along with volume, it generally marks a point of exhaustion, signaling a reversal will happen soon. The amount of volume is depicted in vertical bars, with the bar showing how many shares or amount of cryptocurrencies have exchanged hands over a particular time doed. Liquid, a Japanese exchange that is reported to be another culprit in the Bloomberg piece, said its high trading volume numbers may be due to automated traders, who typically conduct trades using algorithms instead of visiting its website. Several users have multiple accounts on the platform and they often use algorithmic programs known as bots to increase trading volume between their accounts and earn as many tokens as possible.
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