Does Trading Volume really matter ?
Does Trading Volume really matter ?
I’ve only started noticing the Trading Volume stats on my favourite projects. I am a little intrigued as to what this exactly means, does it really matter much ? Some lesser known projects like Yield Yak have barely $4,000 in Trading Volume, yet the TVL is something like $50 million, whereas a better known project like Raydium has a Trading volume of more than $6 Million, with a TVL of only a little more than triple the TVL of Yield Yak ( $160 Million TVL )
I’m also surprised that some lesser known gaming projects like Vulcan Forged have a high trading volume , whereas others ( like Axie Infinity ) have a relatively low trading volume.
The way I interpret it right now ( correct me if I’m wrong ) is that trading volume is high when an ecosystem is very active and adoption is growing relative to other projects, so it’s a good indicator to buy into that project.
Volume matters but it should be real. Don’t be over-excited if you see Volume has been increasing suddenly. It’s because it’s pretty easy to manipulate trading volume whether it’s cex or dex. Have to see also chart reflection on how it’s looking. Have to realize if it’s real volume or fake volume. If the price increase with the volume means real volume coming although they might exit at any time. But if you see just volume increases and not much reflection in price that means the project team doing MM to increase trading volume. Hence the token price hasn’t been increasing.