Understanding Trading Volume in Crypto: Why It Matters

In the world of cryptocurrency trading, price often takes the spotlight—but it’s not the only metric that matters. Trading volume plays a crucial role in understanding the strength of price movements, market liquidity, and overall investor interest.

Whether you’re a beginner or a seasoned crypto trader, learning how to interpret trading volume can help you make more informed decisions and avoid risky trades. Let’s dive into what trading volume means, how it works, and why it’s a key signal in crypto markets.

What Is Trading Volume in Crypto?

Trading volume refers to the total amount of a cryptocurrency that has been bought and sold during a specific time period. It’s typically shown on an hourly, daily, or weekly basis on crypto exchanges like BitMart.

For example:

If 10,000 BTC were traded in the last 24 hours, the 24h volume is 10,000 BTC.

Alternatively, this may also be shown in value terms, such as $650 million.

Trading volume can be applied to:

Individual trading pairs (e.g., BTC/USDT, ETH/AUD)

Specific exchanges

The entire market

Why Trading Volume Matters

1. Confirms Price Trends

Volume can be used to validate whether a price move is strong or weak:

If Bitcoin rises on high volume, the upward trend is more likely to be sustained.

If it rises on low volume, the rally might be short-lived or driven by speculation.

Likewise, when a cryptocurrency drops on high volume, it may signal panic selling or a strong shift in market sentiment.

2. Indicates Market Liquidity

Liquidity is your ability to buy or sell assets without dramatically affecting the price. Cryptos with high trading volume typically have better liquidity, meaning:

Tighter spreads between bid and ask prices

Faster execution of buy/sell orders

Lower slippage, especially for large trades

This is especially important for traders in volatile markets, where seconds matter.

3. Identifies Entry and Exit Points

Volume spikes often occur near breakouts, trend reversals, or major support/resistance zones. If a coin breaks above resistance with a sudden increase in volume, it's more likely to be a legitimate breakout.

Conversely, if prices move with no significant change in volume, the move could be a false breakout or short-lived pump.

4. Reveals Investor Sentiment

Volume reflects interest and activity levels. High trading volume can mean:

Increased confidence in a crypto asset

Institutional involvement

Response to breaking news, upgrades, or regulation

Low volume often signals caution, lack of momentum, or holiday/weekend market lulls.

Where to Find Trading Volume Data

You can view volume data on:

Crypto exchanges (e.g., BitMart trading interface shows volume next to each pair)

Charting platforms like TradingView

Market aggregators like CoinMarketCap or CoinGecko

Most platforms allow you to:

View real-time 24h volume

Compare historical volume

Overlay volume bars on price charts for better analysis

How to Use Volume in Your Trading Strategy

Volume should be combined with other indicators for more accurate decision-making. Here’s how:

You can also use Volume Moving Averages (VMA) to smooth out short-term volume spikes and identify consistent trends.

Volume vs. Market Cap: Key Differences

While both metrics are useful, they serve different purposes:

A coin may have a high market cap but low volume—meaning it's valuable but not actively traded, which can lead to poor liquidity and larger price swings.

Tips for Aussie Traders

If you’re in Australia, here are a few things to keep in mind:

Always check volume in AUD trading pairs (e.g., BTC/AUD, ETH/AUD) on local exchanges like BitMart.

Consider global volume trends when trading internationally recognized tokens.

Watch for local news, tax policies, or government regulations that might affect Australian crypto markets and trading behavior.

Final Thoughts

Understanding trading volume gives you a competitive edge in the crypto market. It tells you more than just what the price is doing—it tells you how many people care.

By incorporating volume into your trading strategy, you’ll be better equipped to:

Confirm price movements

Avoid false breakouts

Trade more liquid assets

Identify smarter entry and exit points

Whether you're swing trading, scalping, or holding long term, volume analysis is a core skill for crypto investors.

Ready to explore high-volume crypto markets?

Sign up with BitMart to access advanced tools, real-time charts, and high-liquidity trading pairs with AUD support.