Understanding the Cryptocurrency Metrics: Trading Volume
Table of Contents
What Is Volume?
Volume exists on each exchange as a measure of the number of transactions. Exchanges typically report their overall volume and the volume of transactions for each currency on their boards. Exchanges generate volume reports, and some organizations gather reports from many exchanges to produce a broader view of cryptocurrency volume.
Cryptocurrency exchanges differ from securities and stock exchanges. They can operate on a 24-hour basis. Traditional stock markets have regular daily hours with distinct openings and closings. When assessing volume information for a digital currency, one must look carefully at the date and time range described in the report.
Why Is Volume Important?
The volume indicator is a small window measurement of the level of activity involving one or more digital currencies. Many investors use the volume reports to establish an idea of the market for the currency. When buying or selling digital currency, it is helpful to know whether it is easy to sell it. A high volume report suggests there are a strong market and many available buyers for the currency.
Whether in large or small volume markets, Koinal stands ready to assist your purchases of cryptocurrency and other crypto trading strategies. We work with leading crypto exchanges that provide a wide range of currency choices. When you are ready to begin investing in cryptocurrencies, Koinal will provide a seamless cryptocurrency purchase experience.
Liquidity and Volume
Liquidity and volume are not the same things. Volume refers to the number of transactions in 24 hours. The volume consists of buy orders and sells orders. Liquidity often means selling currency by converting it to cash or regular government-issued currency. Liquidity often reflects the differences between asking prices and actual sale prices. The essence is the ability to sell a currency based on market conditions.
Liquidity usually refers to transactions that occur while the currency does not offer sales discounts or other price incentives. Bonuses or other incentives can inflate the volume report and give a different impression of the level of interest in the currency than would otherwise exist.
Exchange Volume and Overall Volume
One can measure volume by the amount of transaction on an exchange or all the exchanges that report to a specific information hub. The overall volumes may be helpful for long term strategies. Many investors prefer to look at the volume of a particular exchange and use the single exchange data to inform their decisions.
Impact of Daily Volume Reports
The daily volume reports can suggest patterns, trends, and upward or downward momentum. Many investors read daily volume reports to indicate the current level of demand. When the demand appears to fall, the volumes may go lower. Conversely, high volume can support rising value.
Volume can reflect many factors. For example, world news and events can affect volume. When volume rises or falls, many investors expect the price can follow. Volume can track events and information unrelated to the currency itself but impact buyer and seller behavior.
Koinal Makes Buying Easy
Volume is one of many factors that can affect the price and availability of digital currency. When you are ready to pursue a cryptocurrency investment strategy, Koinal is prepared to help. At Koinal.io, we are committed to supporting crypto trading at all levels of the crypto trading volume. Our user-friendly process works well for buyers of all levels of cryptocurrency trading experience. Koinal works with buyers to provide a portal for purchasing digital currencies using bank credit cards and bank debit cards. The ease of purchase from regular bank accounts makes buying easy, safe, and straightforward.