Whenever we do fundamental research on a coin, we usually focus on three things — Price, Supply, and Market Capitalization. But there is one more important thing: Trading Volume. And, to be honest, this confuses many people.
Sometimes the market is green, and the trading volume is also green. That makes sense. But sometimes the market is red... and the trading volume is still green. What is happening? 🤔
Let's simplify in the simplest way possible.
Trading volume means how much of a coin is being bought and sold in a specific period, usually over 24 hours. It has nothing to do with whether the price is going up or down — it just shows how actively a coin is being traded.
Now, imagine the market is falling — prices are dropping and market capitalization is also plummeting. At this point, two things can happen.
Scenario 1: If people believe in the project, they hold. They say: 'No problem, it will recover.' So, they do not buy more, do not sell — just wait. As a result, trading activity slows down, and trading volume decreases.
Scenario 2: If people no longer trust the project, they panic and start selling at a loss. Others may see the drop and try to buy cheap. So, there are more panic sales and some buying on the dip — basically, a lot of movement. This increases trading volume.
So remember — green trading volume does not always mean that a coin is pumping. It just means there is a lot of action — buying, selling, or both. Do not get excited too early. Sometimes, people see a green volume bar and think: 'Pump is coming!' But it could just be panic selling in full swing. 😅
In summary:
High trading volume = Lots of buying and selling happening
Low trading volume = People are just watching
So, the next time you see green volume on a red day, do not assume that a pump is on the way. Check what is really happening — is it smart accumulation, or just everyone running for the exit?
Always observe. Always learn. And never blindly trust the colors. 😄
