DISCLAIMER: This is not financial advice; the article is for educational purposes only.
What Is Volume?
Volume is the sum total of actual trades taking place, meanwhile, liquidity is the amount available for trading at any single price.
Volume is the cumulative sum of crypto being bought and sold on the market; for example, if $200 billion in BTC is traded daily, the daily volume of BTC is $200 billion.
Usually, the higher the volume of cryptocurrency transactions, the more liquid the crypto market will be.
What is Unusual Volume?
Unusual Volume exposes the cryptocurrencies being traded at an unexpectedly high level. On CoinScreener, transactions with trading volumes at least 2x higher than the average of the last 24 hours is categorized under Unusual Volume.
Beware of Unusual Volume signals on CoinScreener
CoinScreener's web interface presents the distinctive numbers that characterize Unusual Volume signals in a simple and concise style:
- Market
- multiplier
- Price
- Volume
- Time
- Price chart
Further, the toolbar's content can be actively searched for:
- Exchange: Binance spot/Binance USDⓈ-M
(More Crypto Exchanges to be updated soon)
- Price Impact: Pump/dump
- Multiplier: up to x50
- Time frame: 5m/15m/1h/4h
The notification indicators on the mobile phone are similar to the interface on the Web app
You'll need a "Pro" account, to observe more signals of unusual volume.
Visit CoinScreener for more information.
Why is Unusual Volume important?
The sudden presence of an unusual volume often precedes a big move in the market, either upside or downside. That’s especially true if the move is at a critical point like a support or resistance level, a moving average, or after an earnings announcement. Think of volume as the fuel behind a price move. The more fuel, so the thinking goes, the more likely the move will be sustained.
Unusual Volume is very informative, especially for day traders, as a spike in volume might accompany a price movement. It can be a merger or acquisition, earnings, or any other event. Once it’s over and the breakout is complete, the price may continue increasing even without a continued increase in volume.
Some factors you need to consider when being notified of an Unusual Volume:
- Is the market near support or resistance?
- Has the market just begun a new uptrend?
- Are there bullish or bearish reversal candlesticks forming?
- Did the market gap up or down?
Conclusion
Research shows positivity in markets with high trading volume to outperform other markets in one week, but subsequently, underperform at the longer horizon.
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