What is Volume in Cryptocurrency?

What is Volume?

Volume, or trading volume, is considered an important metric because it shows how people are reacting to a price change, for example. It can also hint at what’s sustainable and what’s a flash in the pan.

Trending Now

It’s kind of like the “Trending Now” list you can see on video streaming apps like Netflix, Hulu or Prime. If the show or movie is trending, it means a lot of people are watching it (which is volume). It doesn’t tell you if they like it, hate it, or just can’t stop watching the train wreck … it only indicates popularity. And the reason they show you this curated list is because most people want to watch (or do) what others are watching (or doing). It all boils down to FOMO — fear of missing out.

Fake Popularity

Here’s the caveat: some online exchanges offer traders incentives, for example a “cash-back” reward, paid in crypto, that matches the fees paid. This would encourage more trading to earn the reward, which might give a skewed picture of how popular a coin really is. Yeah, it’s just like high school … popularity can be bought! And it’s often fake.

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