Great basic Charts from www.Coincheckup.com
Volume observance is a very simple to use and a useful tool in assessing where an asset will go price wise and sadly is often overlooked
So how can looking at Volume help you?
Volume is the amount of buys and sells that occur in an Asset in a given period.
The more buying and selling there is, the more volume there is.
There are 2 main changes in volume to lookout for, if we for now only look at the basics of Volume:
The most obvious is an increase in Volume - this indicates that there is more activity and if coinciding with a price change - that would most often indicate a strong chance the price will move with more conviction and guarantee.
If there is promising looking price changes and no significant Volume changes then we can confidently say there will be little change in the price direction of the Asset.
The second change is a significant change in volume along side a big change in price - this often indicates a trend reversal or a change in price direction.
So, if you notice a jump in Volume and a jump in price, and the price of the asset had been going down for sometime, it could likely mean the price would start to go up. This would be a trend reversal signal.
And so too, if you noticed a big move in price and Volume together and the Asset price was going up, it could likely be a trend reversal and the price would then start to go down.
Looking at Bitcoin Volume over the last year in the chart above we see that Volume has been steadily decreasing over the last 5 months, which is not a great sign, but looking at the whole year in general, Volume is up quite a degree, that s a good sign.
In a shorter period - 6 months in the chart below we see......
Whilst Volume is not showing great things for Bitcoin as it is going down, it has begun to level out and calm down and this can often be a good sign, that in the short term at least, we a looking at a increase in price for now and a - at least a short upward trend for a few weeks.
Your Analytically
Ptychadina