1. What is Volume ?
Volume (trading volume) refers to the total number of cryptocurrency coins, tokens, or contracts traded on an exchange (like Binance) or across all markets for a specific asset within a given time period (e.g., 24 hours, 1 hour, 5 minutes).
Simply put, it measures how much activity and interest there is in a particular cryptocurrency. High volume means many buyers and sellers are actively trading; low volume means less activity.
2. How Does It Work?
Volume is calculated by adding up all the trades executed during the selected timeframe.
Example: If Trader A buys 5 BTC and Trader B sells 3 BTC in the same market within 24 hours, the total volume for that period would be 8 BTC (not 2 BTC—it counts both sides of each trade, or the total amount exchanged).
On charts, volume is usually displayed as a histogram (bar chart) at the bottom, often with colors:
· Green bar: More buying pressure (price increased during that period).
· Red bar: More selling pressure (price decreased during that period).
3. Its Use on Binance
On Binance, volume is a core metric displayed everywhere:
1. Market Overview Pages: Lists coins with their 24h trading volume.
2. Trading Pair Pages: Below the price chart, volume bars show activity per candle (1m, 15m, 1h, etc.).
3. Order Book & Trade History: Real-time volume of recent trades.
4. Futures & Margin Trading: Volume includes contract trades and liquidations.
5. Volume-Based Fees: High-volume traders get fee discounts (Binance VIP tiers).
4. Benefits for Traders
Volume is one of the most important tools for traders because:
1. Confirms Trend Strength:
· Uptrend with High Volume: Strong bullish sentiment, trend is likely to continue.
· Uptrend with Low Volume: Weak interest, possible trend reversal.
2. Identifies Breakouts:
· A price breakout above resistance or below support with high volume is more likely to be genuine.
· Low-volume breakouts are often "false breakouts" and may reverse.
3. Measures Liquidity:
· High volume = high liquidity. You can enter/exit large positions without significantly affecting the price (slippage is lower).
4. Spots Reversals:
· Volume Spike after a long trend can indicate exhaustion and a potential reversal (e.g., "selling climax").
5. Avoids Low-Volume Traps:
· Low-volume coins are riskier—easier for large traders to manipulate prices ("pump and dump").
6. Market Sentiment Gauge:
· Rising price + Rising volume = Strong buying interest.
· Falling price + Rising volume = Strong selling pressure.
7. Supports Technical Analysis:
· Indicators like Volume-Weighted Average Price (VWAP), On-Balance Volume (OBV), and Money Flow Index (MFI) rely on volume data.
Key Takeaway for Binance Traders:
"Volume is the fuel of the market." A price move without supporting volume is suspicious. Smart traders never ignore volume—it helps them distinguish between real market movements and noise, manage risk, and time their entries and exits more effectively.
On Binance, always check volume before entering a trade, especially in altcoins, to ensure sufficient liquidity and genuine price action.
