Volume analysis is considered a powerful tool for trading crypto, particularly on Bitcoin.
In fact, the analysis of price trends tells only part of the story, while the analysis of trading volumes reveals the strength of price movements.
For example, a potential price increase accompanied by high volumes indicates investor confidence, whereas an identical movement with low volumes might need to be considered a false signal or a trap.
Volumes
“Trading volumes” refer to the total number of BTC, or their equivalent in fiat currency, traded on an exchange or in the markets over a specific time period.
Volumes can be analyzed across different timeframes, although the most commonly used is the daily timeframe.
When analyzing Bitcoin’s price trends over a specific period, it is always advisable to also examine the trading volumes during the same timeframe.
However, besides the timeframe, there are two other variables to consider when conducting volume analysis o
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