In the market of cryptocurrency we saw many types of pump and dump event which are responsible for profit and loss for traders.
But here today in this article we would like to talk about the high volume trade of particular crypto coins.
We will explain the reality about the trade volume and also we will explain how to figure out the reality behind the trade volume behind the particular coin market.
What Is Trade Volume?
Total value of buy and sell in 24 hours of a particular coin’s market is known as Trade Volume.
Amount of trade volume depends upon the use of the coin. If a particular coin will be used by people more than that coin will have a very high trade volume than any other coin.
For example Bitcoin always has a very high trade volume most of the time. People have belief in Bitcoin like assets. After Bitcoin Tether( USDT), BUSD, Bitcoin Cash ( BCH) , Ethereum ( ETH ) are high trade volume crypto coins.
High Trade Volume High Trust Level
High trade volume of a particular coin indicates the stability of the market of that coin. And in that situation people use that coin for day trade to get 1% to 10% profit.
Usually high volume trade coins are best coins for day trade to make small profit daily.
So we can say high trade volume of a particular coin shows trust level of stability in price.
High Trade Volume Can Be Scam
Cryptocurrency Market is highly volatile. Pump and dump are usual events every month.
Many times it happens that a particular coin doesn’t have actual use and trade volume but the coin’s team tries to pump the trade volume of the coin.
So the team only invests his money in that particular coin to increase the price and trade volume of the coin.
In this situation people will get attracted toward the coin but within 24 hours the market of that particular coin crashes.
So before getting into any coin we should do lots of research and analysis on why the price of the coin is increasing. Is there anything new news or nothing going on there.
So it always remains better to analyse the reality of the increase in price and Volume of the coin’s market instead of following the hype blindly.
In the present time we can see DOGE COIN ( DOGE), in actual Doge Coin have no new upcoming project but this coin is in hype because of a tweet by Elon Musk. At this date 25 April 2021 , Doge coins have the highest trade volume. High trade Volume of doge coin in the present is really an illusion, because it will last for a few weeks or months but not for long term.
So use hypes to manipulate your profit and loss in that hype time interval instead to get into investment for long term.
Learn how to trade with low risk by click here
Sudden Pump Could Be Reason Of High Trade Volume
It is very common for most of the time, when a coin gets pumped by someone individually or by actual news impact then that coin will have high trade volume for some weeks and also it may last for a few months.
So always be careful about such coins which have high trade Volume and are pumped a few times back.
Pump in the price mostly happens by the coin’s team movement but sometimes the team itself does pump to attract the attention of investors in their coin.
Conclusion About High Trade Volume Of Coins
Always do research about such coins which are new and have high trade Volume. And also be careful about its history news. It will help you to identify the reality of the trade volume amount.
Otherwise blindly investment in high trade volume coins may lead to big loss.
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