Analysis of the Volume of Trading of the Cryptum: A guide to unlock market insights
Crypto currencies have become increasingly popular in the past decade, and many investors want to use their potential for growth. However, one metric that can provide a valuable insight into the market effect of the crypto currency is the volume of trading. In this article, we will explore how to analyze the volume of trading and discover significant patterns in the cryptocurrency markets.
What is the volume of trading?
Trading scope refers to the total amount of the crypto -waves that are traded over a period of time, it is usually measured in the units of XRP (XRP) per unit. This is an important metric for merchants and investors, as it can help identify market trends, movement of prices and potential failures or sequels.
Why analyze the volume of trading?
Analysis of trading volumes offers several advantages:
- Market Sentiment : High trading volume often indicates a strong market mood, where customers are more active than the seller.
- Price reactions
: A significant increase in trading volume can signal the upcoming price movement, such as piercing or renaissance.
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How to analyze the trading volume
To acquire valuable insights from the trading volume analysis, follow these steps:
1. Identify key periods
- See historical data to identify certain time frames that show high or low trading amounts.
- Focus on the main turning points, such as market interruptions, rejection or extension.
2.
- Use a chart software (eg traditionview) or Internet platforms (eg coingecko) to draw trading volumes for different time frames.
- Analyze the slope and direction of the lines to identify the samples.
3. Identify trends **
- Look for repeating trends, such as:
+ Increasing trends
+ Reduction of downlines
+ Bullish/Bullish-Bearish Kling
4. Categorize the amount of trading at a price
- Divide the trading volume into categories based on the price of price:
+ Low volume (LVL): generally used for small, low transactions.
+ Middle Volume (MV): Used for medium stores.
+ High volume (HV): reserved for high high -value transactions.
5. Evaluate trading volume in context
- Consider the amount of trading along with other market measuring data, such as:
+ Price movements
+ Market capitalization
+ Liquid indicators (eg, licit/ask space)
Popular quantities of cryptocurrency trading
Here are some examples of popular cryptocurrency and their appropriate trading volumes:
| Crypto | Trading Volume (XRP) |
| — | — |
| Bitcoin | 1.5 billion + |
| Ethereum | 2.5 billion + |
| Ripple (xrp) | 500 million – 700 million |
| Litecoin (LTC) | 50 million – 100 million |
Example of trading volume analysis
Suppose you have identified the pattern of trading volumes for Bitcoin:
- Historical data show that the price of cryptocurrencies has set out upwards from January.
- Analyzing trading volume, you notice:
+ Spike with large quantities on February 10th, coincides with a significant increase in prices.
+ Moderate volume decreases from February 15 to February 20.
Based on this analysis, your conclusion could be:
“Bitcoin price is likely to break through a resistance level of $ 18,000 and continue their trend increase. A large trading volume on February 10 suggests that traders are safe in the potential of cryptocurrency.”
Conclusion
Analysis of trading volumes offers a strong tool for market insights, providing valuable information about market feelings, moving prices and potential breakthroughs or re -processing.
