What is Total Exchange Volume?
Let's find out Total Exchange Volume meaning, definition in crypto, what is Total Exchange Volume, and all other detailed facts.
Total exchange volume measures the total amount of a cryptocurrency that has been traded on a particular exchange. Practically all cryptocurrency exchanges track and record it on the blockchain daily. The total exchange volume of a specific exchange can be located on their websites. The amount of currency that has been traded in the last 24 hours is called the daily exchange volume.
Why Is Total Exchange Volume Important?
For cryptocurrency traders, total exchange volume is a crucial metric since it displays how much money is being moved on a given platform. The exchange is more liquid if the number is higher. Therefore, trading big quantities of cryptocurrency on exchanges with greater total exchange volumes is much easier.
Since it considers multiple elements that determine value, total exchange volume is a more accurate indicator of value than market capitalization. It assesses not only supply and demand, but also active use cases and a cryptocurrency's potential growth.
Volume is one of the most influential factors in the crypto market. The volume of a market can influence where a cryptocurrency will trade and overall how valuable it is. Traders prefer high-volume markets because they have more liquidity and reduced volatility. This is the case because there might not be enough liquidity to support price changes when huge orders are made in low-volume markets.
The fundamental purpose of exchange volume is to demonstrate how well prices stand during periods of strong activity. For instance, if prices are setting new highs on light volume, it indicates that traders aren't persuaded that the upward trend will last.