What does increasing trading volume means to traders?
What does increasing trading volume means to traders?
I know bitcoin is highly liquid enough. One of the exchanges that I am using sent me a push notification which says that the trading volume for BTCUSDT has increased.
I know what trading volume is but why the notification? Are traders using it to take advantage in the market to make profit?
It means there’s a surge on demand. There’s a lot of traders nowadays trading based on the trend for short term profit.
The notification is either to notify all the holders of Bitcoin in both spot and futures about potential profit occur or to attract users to trade on the trend since short term traders can get quick bucks by just riding the trend.
A sudden increase in trading volume means there’s an interest in the coin. It doesn’t necessarily mean that the price is going to increase but it’s a good indication that there’s hype, interest, liquidity…. That’s usually how those “signal bot” works if I’m not mistaken. Based on the trading volume.