How to analyze the trading volume for market information in cryptocurrency
The world of cryptocurrencies has recorded a significant increase in commercial activities in recent years, with many new users being launched every day. While some consider this growth as a sign of the market potential, others keep it as a sign of warning. An important measure that can give an overview of the health and direction of a cryptocurrency is the commercial volume.
What is trading volume?
The negotiation volume refers to the total amount of cryptocurrency, which was exchanged during a special period. It represents the number of parts or tokens that are exchanged at a certain exchange, e.g. B. Bitcoin (BTC) on Coinbase or Ethereum (ETH) on Binance. The trade volume is an important indicator of market activity and can be influenced by various factors, including news, feelings and price movements.
Why analyze the trading volume?
The analysis of the commercial volume can offer several advantages:
- Market feeling : A high volume of negotiations can indicate a strong feeling for the market, buyers increase prices while the sellers are withdrawing.
- Price movement : The trading volume can help identify trends in the price movement of a cryptocurrency. A high volume of purchase activity can achieve higher prices, while low volumes can indicate resistance or decline.
- Volatility of the market : Low negotiation volumes can indicate the volatility of the market, since fewer buyers and sellers take part in the market.
- Price forecasts : The analysis of the trading volume can also help to predict future price movements through the identification of models and trends.
How to analyze the trading volume
Follow the following steps to analyze the negotiation volume for market information:
- Select a cryptocurrency
: Select a cryptocurrency with which you are familiar or have access to historical data.
- Search for the market : Stay up to date with news, trends and developments that can affect the trading volume.
- Use merchant data platforms : Use online platforms such as CoinmarketCap, Cryptocompare or Binance -API to access historical merchant data including volume.
- Identify trends : Search for commercial volume models, such as: B.:
* High trade volume for important events (e.g. new registration announcements)
* Low negotiation volume during the consolidation periods
* Increased activity on certain stock exchanges
- Analyze the trading volume in time : Study the trend in the negotiation volume over a longer period of time to determine changes or changes.
Tools and resources
To make the analysis of the commercial volume more efficient, use the following tools and resources:
- Handy data -Websites : Coindesk, Cryptoslate and Coingecko indicate complete data at cryptocurrency prices, volumes and market trends.
- API Börsen: Access to historical data via Exchange -APIS like Binance -Api or Coinbase Developer Portal.
- Data visualization tools : Use tools such as Tradingview or Etoro to display the trading volume over time.
V.
Information sources on cryptocurrency : Stay about market news and trends with renowned sources such as Coindesk, Block or Coindesk.
Example of the analysis
Suppose you are interested in analyzing the Bitcoin trading volume (BTC) on Coinbase for a certain period of time:
- Date: March 1st – March 31st
- Commercial volume:
+ Daily average: 10,000 BTC per day
+ Total volume for the month: 200,000 BTC
+ Highly daily volume: 15,000 BTC (March 17)
+ Lowest daily volume: 5,000 BTC (March 15)
Based on this analysis, you can come to the conclusion:
- There is a strong feeling for the market in the period, a high negotiation volume that indicates the trust of buyers in the value of the currency.
- The price movement suggests that prices rise because dealers actively buy and keep Bitcoin.
- The volatility of the market is moderate and with a certain degree of fluctuations in the expected prices.