The role of commercial volume in market psychology: understand the impact on the prices of cryptocurrencies
Crypto currency, a decentralized digital currency, has attracted significant attention in recent years. With its potential to interrupt traditional financial systems and provide access to financial markets for individuals around the world, the Crypto currency has become a hot issue among investors, traders and participants in the market. An aspect that is often neglected or misunderstood is the importance of the volume of negotiations in the configuration of market psychology.
What is a commercial volume?
The scope of negotiations refers to the total number of shares or currencies that are exchanged in a particular market in a particular period of time. It represents the general activity of buying and sales of customers and suppliers, which can be used to measure the feelings of market, liquidity and possible price movements. In the CRIPTO currency, the amount of negotiations is measured in units such as BTC (Bitcoin), eth (Ethereum) or USDT (Tether).
The role of commercial volume in market psychology
The commercial volume plays a key role in the configuration of market psychology for several reasons:
- Mercado feeling : The great volumes of negotiations often indicate a strong sense of market, with customers and suppliers participating in aggressive activities of purchases and sales. On the contrary, low commercial quantities suggest a sense of bass or bull.
- Price Volatility : The amounts of negotiations may contribute to the price of prices, as they affect the total number of transactions in a particular exchange. When the volume of negotiations increases, it can lead to more prices fluctuations, which makes it difficult for investors to predict the market movement.
- Liquidity : Large negotiations volumes indicate sufficient liquidity in the market, allowing effective detection of prices and minimizes the impact of volatility. On the other hand, low amounts of negotiations can create the inefficiency of the market, leading to potential losses for merchants.
- Emotional intensity : Commercial volume can also be used to measure emotional intensity in the market. Operations with large quantities often occur during a period of high volatility or emotions on the market, while low -volume operations suggest a quiet and rational market.
Impact on cryptocurrency prices
In the context of the cryptocurrency trade, powerful negotiations are related to:
- Price rejection : When the negotiation volume is low, it may indicate a lack of confidence among investors, leading to rejecting prices and potential losses.
- Support/Resistance of Price
: A large number of negotiations can help identify support or resistance level, as they tend to attract more customers and suppliers around these areas.
- Market Trends : The volume of negotiations can be used to confirm market trends, such as the direction of trends or bull trend force.
CONTRIABLE -INTUITIVE STRATEGIES
Although the volume of negotiations is often associated with high-frequency negotiations strategies, there are some counter-utuitive approaches that exploit it for profit:
- Volume Diftuers
: Buy and sell narrow movement prices can create a volume differential, which can be used to obtain resulting price fluctuations.
- RANGING RANGE : Merchants can use low quantities of trade in the range or between two support/resistance levels, using a limited activity in these areas.
Conclusion
In conclusion, commercial volume is a key component of market psychology, affects the feeling of market, liquidity and emotional intensity. Understanding the role of negotiations in the configuration of the prices of cryptocurrencies, traders can obtain valuable information about possible market trends and capabilities. However, it is also crucial to recognize that the negotiating volume in itself is not a reliable indicator and that it should be used together with other factors to make informed investment decisions.
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