Cryptocurrency trading volume
One of the factors for assessing the liquidity of a cryptocurrency is its trading volume.
Trading volume is the total number of shares or contracts that are sold for a specific price. We can measure this in any type of securities (stocks, bonds, futures, etc.) that are traded over a 24-hour period. It should be noted that a day is a more frequent period for evaluation. But sometimes it is possible to find calculations for a week or a month.
Cryptocurrency trading volume is the total number of coins sold for a specific price. On such rating sites as coinmarketcap, trading volume in 24 hours indicates how many people are involved in trading. The greater the trading volume, the more people participate in the trading session.
For example, with such a popular asset as Bitcoin, it is very easy to enter the market and get out of it. This fact is due to the high liquidity of Bitcoin.
When an investor decides to deal with other cryptocurrencies, it is important to pay attention not only to the volume of dollar trading operations but also to the trading volume with other cryptocurrencies. This will help to avoid a false idea about the current trading volume.
In order to find out the actual amount of coins currently being traded, it is necessary to divide the dollar trading volume in 24 hours by the rate of the virtual asset.
A good circulation of cryptocurrency can be designated in the range between 60 and 150 million dollars. If you look at the cryptocurrency charts that are in this range, you will see that their price has risen unbelievable sharply, and most likely more than once.
Knowledge of the current rate and trading volume helps to make better decisions during the trading process.