First of all, it is important to define volume in economic terms because it is one of the most important metrics in the cryptocurrency world. Volume refers to the quantity of coins in a certain time frame. Knowing a currencies volume is important because it is necessary to know if one can buy or sell that coin easily at that time. If one is engaged in a day trade, it is all about liquidity. Swing trading is a little bit different because of the long time one is spending in the market.
For example, the volume of a token on a CoinMarketCap shows the number of coins that have been traded in the last 24 hours. This basically shows how many people are buying and selling the coin. If the price of Bitcoin goes up and shows massive volume, that shows that a lot of people are making moves and the price will likely keep going up. If the price of Bitcoin drops but there’s minimal volume that shows that only a small amount of people back the trend.
One of the reasons volume is one of most prominent metrics for cryptocurrencies is the number of ways it can be broken down. From volume, one can deduce the direction and movements of a coin. It is an essential metric for traders. Volume can be examined in minute detail. One can track volume on CoinMarketCap by the last 24 hours, the last week, or the last 30 days. This helps reveal if a coin’s recent oscillations are an aberration or the norm. A coin with frequent heavy movements won’t attract attention if it has high volume. If a coin normally has less volume, heavy trading in the last 24 hours could indicate there’s some support behind the move it may be making.