Understanding of the cryptocurrency market volume: effects on investors, market participants and the industry as a whole
Over the years, the world of cryptocurrencies has an exponential growth with their value, the cryptocurrency market, which consists of various digital currencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and many others. However, one aspect of the cryptocurrency ecosystem, which often flies below the radar – is a significant importance for understanding its dynamics – the market volume.
** What are market volumes?
Market volumes relate to the total amount of cryptocurrency transactions or exchange. These volumes can be measured based on the commercial volume, the transaction number and the traded value. Instance, bitcoins daily trading volume,
** Why are market volumes important?
Market volume have several effects on investors, market participants and the industry as a whole:
- Conversely, low trading volumes can assume that buyers and sellers are less active.
- Transaction number : Higher transaction numbers often have interest in cryptocurrency or reduced market volatility.
. A sudden increase in the commercial volume can signal a bullish feeling (increasing demand)
- Market feeling
: The total trade volume of a certain cryptocurrency can provide information about the market mood. For example
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Cryptocurrency influence factors market volumes
Several factors contribute to market fluctuations, including:
1.
- guidelines of the central bank : money policy decisions
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4.
Investor implications
Understanding the market volume for cryptocurrencies is essential for investors, since it helps them:
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Market player implications
The understanding of the market volume also has an impact on market participants:
1.