What is trading volume?

How much activity does a market really have? Think of a store: what the products on the shelf cost is one thing, and how much it sold during the day is another. In crypto, trading volume is like that day’s sales.

If 10 tokens priced at €2 each change hands on a hypothetical exchange, the volume is 10 tokens or €20. If the same tokens are sold again at the same price, total volume reaches 20 tokens or €40. We count completed trades, not how many different coins or how many people were involved. Every trade has a buyer and a seller, but we don’t count it twice.

The number you see may refer to a trading pair, such as BTC/EUR, a single exchange or all the markets a platform tracks. Orders waiting to be filled don’t count toward volume.

Why it matters

Volume shows how intense trading activity was. A price move on higher volume comes with more trades, not necessarily more participants. It doesn’t prove the move will continue. High volume can appear both in a rally and in a sharp drop.

For us, it always needs to be compared over equivalent time periods and on the same market. Daily volume can’t be compared directly with weekly volume. Also, volume and liquidity are not the same thing: the former records what happened, while the latter is about how easily a trade can be executed without moving the price much.

What to watch out for

High volume doesn’t mean an equal amount of “new money” entered the market. The same funds can be used over and over again. Nor is it the same as market cap, i.e. the price multiplied by the circulating supply.

There’s also artificial inflation through fake trades (wash trading), where the same person or connected participants create misleading activity. Check what exactly the figure includes: the spot market, derivatives or different exchanges. A big number alone guarantees neither a reliable market nor easy execution of your own order.