Cryptocurrency Market Size: Why Analysing?

Author & Guarantor: Elena Yefimenko
6 min read

During the preparation of forecasts for the price movement, analysts use a large number of tools. One of them is the indicator of the volume of trades, which, according to the cooperation, is an important part of technical analysis. There is no complexity to set this indicator.


It’s present on popular cryptocurrency exchanges and on separate analytical platforms. The principle of any market is reduced to the ratio of demand and supply.

These indicators are key, and directly affect the cost of the crypto assets. If you predict a situation when interest in bitcoin has fallen just that they don’t want to buy it, even in the form of a collection of elements, it’s quite obvious.

Thanks to the indicator of the volume of trade, you can track the number of completed transactions by a specific cryptocurrency for a selected period of time. In other words, this is monitoring the existing challenge to the token and fixing its rise or fall.

Pay attention to the relationship between the level of demand and price changes on the graph. Two obvious bursts are observed on it, when the value of the active has dropped down to an attractive level for opening new positions.

Changes in indicator(s) also follow the price. If a substantial increase in volume is observed on the graphs, this means that the positions are picked up by both professional market participants, as well as the speculant. These big players have a strong impact on the market and thanks to them, the biggest and most significant splashes will come.


Another point that should be taught to newcomers in crypto trading: a disbalance. With the disbalance, it goes out beyond the limits of such a range and, as a rule, a certain trend is formed.

This is due to the fact that at the time of the formation of the price positions ’squeezed’ in the side, while the traders keep the steps in advance of the price dynamics.

As soon as the price goes beyond the limits, the feet are removed and the volumes begin to swallow the big players, forming a trend. These actions can be tracked using the Volume indicator. Let’s take a look at the typical situation in the cryptocurrency market with an emerging trend.

Traders gradually fill up their brackets and reduce the activity of new purchases in anticipation of arrival or switching to other altcoins. The interest on the asset is reduced.

Price Models

The graph will record the drop in the volume of trade and only then, as a consequence, it can lead to a decrease in the price. By the way, far from always, when the volume of trade is reduced, one should expect a momentary rotation of the trend.

With good attitudes, “bulls”’ fairly quickly can activate and encourage new purchases, thus generating interest and levels of volume. When analyzing price models during the crypto trading, the volume of trading is often used as one of the supporting indicators.

When a certain price model is disassembled, it is expected that its completion will be accompanied by an increase in the indicator of the volume of trades.

Another important situation when trading in cryptocurrency, when this indicator is used, is to analyze how stable the support and support lines are. The more the value of Volume becomes when reaching a certain level, the more stable it can be considered.

If, at the time of the formation of the lower price line, the volume of trade was not marked by a significant increase, then the breakthrough of this level with a maximum air pressure in the air.

By the way, if you analyze the values ​​of Volume still and in a horizontal cut in relation to candles, you can identify a number of interesting and useful green coffee

So, operating on it, at the same time, will not make it difficult to identify the real levels of resistance and support, which are interesting to the market. It is also an excellent key for checking the stability of the price trend at a particular moment of time.

If the trend is emerging, then the growth of the price will be unavoidably supported by an increase in the volume of trade. Insignificant drops are supported by a temporary decrease in the Volume value. The ability to work with such an instrument is definitely given a number of advantages when trading on the crypto market.

There are three main indicators of the volume of trades:

  • Horizontal
  • Vertical
  • Cluster.

Vertical Volume Indicator

Vertical volume displays the number of the included data sheet at a certain interval. So it is possible to track the setting of the traders at different time intervals and predict the direction of the trend.

Horizontal Indicator

When working with a horizontal type indicator, the intepec is referred to a specific price level. It is convenient to work with this tool when analyzing support lines and only how much they are stable.

Cluster Analysis

Cluster analysis of trading volume is called “candlestick x-ray”. It displays the volume that was traded at a specific price during the entire process of forming one candle.

The horizontal indicator consists of the sum of such charts for a selected period of time.

This type of analysis in the cryptocurrency market is used by more experienced traders. Thanks to it, the definition and confirmation of strong support or resistance levels is formed.

When determining large volumes inside a candle, it is very important to follow the further reaction, since often after leaving the price corridor, such levels are tested as new support positions.

So, out of inexperience, having opened a trading position immediately after revealing a large volume, you can run into a further check of the level and its breakdown.

In general, to begin with, the ability to work with horizontal and vertical analysis will be more than enough. You should not be scattered and try to cover all existing tools at once.

A measured, systematic approach is important in trading. The crypto market, like any other, does not like spontaneity and thoughtlessness. This will definitely lead to the drain of the deposit.

Only the formation of a competent trading strategy and strict adherence to it will lead to great results. Take each tool individually, disassemble, use and leave what is most useful and proven to be effective.

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