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Glossary

Volume

Volume in crypto refers to the total amount of an asset traded over a specific period of time. It reflects the level of market activity, showing how many tokens or coins were bought and sold — usually measured in the asset itself or in USD value. Volume is a key indicator of liquidity, trader interest, and price momentum across centralized and decentralized exchanges.

Volume is tracked on platforms like CoinMarketCap, CoinGecko, and analytics dashboards like DefiLlama.

How Volume Works

  • Recorded Per Exchange – Each CEX or DEX tracks the number of trades for each pair.
  • Time-Based Metric – Volume is usually shown over 24 hours, but also daily, weekly, or monthly.
  • Includes Buys and Sells – Both sides of the trade contribute to total volume.
  • Tied to Price Movements – High volume often accompanies big price changes.
  • On-Chain vs Off-Chain – DEX volume happens on-chain, while CEX volume is off-chain and tracked internally.

Key Features

  • Market Activity Signal – High volume indicates strong trader interest or volatility.
  • Liquidity Indicator – Assets with higher volume usually have better liquidity.
  • Used by Analysts – Helps identify trends, breakouts, and reversals.
  • Project Health Check – Consistent volume shows sustained user engagement.
  • Different Types – Spot volume, derivatives volume, and DEX volume serve different purposes.

Benefits of Volume

  • Easier Trade Execution – High-volume assets are easier to buy and sell without slippage.
  • Market Validation – Rising volume can confirm bullish or bearish price trends.
  • Investor Confidence – Assets with strong volume are seen as more legitimate or active.
  • Supports Technical Analysis – Volume patterns are key for trading strategies and chart analysis.
  • Ecosystem Growth Signal – Rising volume on a DEX or token often reflects growing adoption.

Use Cases of Volume

  1. CEX Trading Volume – Platforms like Binance and Coinbase show daily trading volume for BTC, ETH, and altcoins.
  2. DEX Volume Tracking – Use Dune, DefiLlama, or Token Terminal to analyze protocol volume.
  3. NFT Marketplace Activity – Track volume on platforms like OpenSea or Blur to gauge collection momentum.
  4. Launch Day Monitoring – Token launch volume helps assess early demand and investor interest.
  5. DeFi Protocols – Protocols like Curve or Balancer rely on high volume for efficient swaps.
  6. Volume-Based Trading – Strategies like breakout trading use volume surges as entry signals.

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