What is trading volume (VOL)?
Trading volume (volume — VOL for short) shows the total amount of buying and selling of a crypto asset in a given time frame. It is a concrete measure of interest in the market. High volume usually points to strong market participation, while low volume points to weak interest. In technical analysis, trading volume is used as a confirming indicator that supports or weakens a price move.
How is trading volume measured?
Trading volume can be expressed in two ways:
- Quantity-based: The amount of the asset that changed hands in a given time (e.g., 12,000 BTC)
- Value-based: The total monetary value of the trades that occurred in the same time (e.g., 800 million USD)
In crypto markets, the most common reference is the 24-hour trading volume. This data shows the activity level of an asset in the market from a daily perspective.
Why is trading volume important?
Volume reveals information that price alone cannot tell:
- Confirms the price move: Rising price with rising volume shows that the trend is strong
- Indicates hesitation: If volume is low while price is moving, the move may be weak
- Confirms breakouts: A break of a resistance or support level is considered more reliable when it occurs with high volume
- Shows liquidity: Large trades affect price less in high-volume assets
- Reflects market sentiment: Volume spikes can point to strong news or announcements in the market
The relationship between volume and price
In technical analysis, volume and price are read together:
| Price direction | Volume status | Interpretation |
|---|---|---|
| Rising | High volume | Strong uptrend signal |
| Rising | Low volume | Weak trend, may not be sustainable |
| Falling | High volume | Strong selling pressure |
| Falling | Low volume | Weak downtrend; possibility of recovery |
| Sideways | Increasing volume | A breakout may be approaching |
Trading volume on Paribu
In the Paribu app, on the Market Detail page Chart tab, the VOL indicator below the candlestick chart shows the trading volume formed for each candle as a bar chart. VOL is enabled by default on the candlestick chart and gives clues about whether the price move is supported.
In the market list, the 24-hour trading volume is displayed for each asset, so you can easily track which asset has strong activity that day.
The difference between trading volume and liquidity
Although trading volume and liquidity are linked, they are not the same:
- Volume: The total amount of buying and selling that occurred in a given time
- Liquidity: How easily buy and sell orders match; the depth of the order book
High volume usually points to high liquidity, but short-lived volume spikes may not provide a lasting contribution to liquidity.
Note: Before trading a crypto asset, looking at both the 24-hour volume and the depth of the order book increases your chance of trading at the price you expect. A large order on a low-volume asset may cause slippage.
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Paribu