A cryptocurrency’s trading volume is the number of coins that have exchanged hands during a defined period of time, usually 24 hours. In other words, the 24-hour trading volume of a cryptocurrency is how much value of a coin has been bought and sold over the course of a day.
Exchanges usually show the trading volume of a cryptocurrency on their own exchange, which would not be the overall trading volume of that cryptocurrency across the entire market. Before investing, it is important to look at the total trading volume of a cryptocurrency and not only at its volume as it is presented in a single exchange.
Volume is often considered the most important metric for a cryptocurrency trader because it indicates the coin’s normal rate of movement and signals any aberrations from it. If a coin is moving it means money is going to be gained or lost and the game of predictions as to the direction of value is underway. If, for example, a coin with relatively low trading volumes suddenly shows very high trading volumes, that could indicate increased support and an impending rise in value. By analyzing a coin’s volume over both short and longer periods, investors can predict the moves it is likely to make.