Understanding the volumes of the cryptocurrency market: implications for investors, market actors and industry as a whole
The world of cryptocurrencies has experienced exponential growth over the years, with its value the cryptocurrency market, which consists of several digital currencies such as Bitcoin (BTC), Ethereum (Eth), Litecoin (LTC) and many others. However, an aspect of the cryptocurrency ecosystem that often flies under radar, but has a significant importance to understand its dynamic, are the volumes of the market.
** What are market volumes?
Market volumes refer to the total amount of transactions or cryptocurrency exchanges. These volumes can be measured in terms of negotiation volume, transaction count and negotiated value. Instance, Bitcoin daily negotiation volume,
** Why are market volumes important?
Market volumes have several implications for investors, market actors and industry in general:
- On the contrary, low negotiation volumes may demand that buyers and sellers are less active.
- Transaction count : higher transactions counts often indicate interest in cryptocurrency or reduction in market volatility.
. The sudden increase in commercial volume can indicate an upward feeling (increased demand)
- Mercado feeling
: The volume of general negotiation of a specific cryptocurrency can give clues about the feeling of the market. For example
.
Volumes of the market for influential cryptocurrency factors
Several factors contribute to market fluctuations, which include:
1.
- Central Bank policies : Monetary policy decisions
.
4.
Implications of the investor
Understanding the volumes of the cryptocurrency market is essential for investors, as helps:
1.
.
.
Market player implications
Understanding market volumes also has implications for market actors:
1.