Trading Volume
The total value of an asset traded on exchanges over a given period, typically 24 hours.
Trading volume measures the total value of buy and sell transactions for an asset over a set period. High volume relative to market cap suggests strong price discovery and liquidity; low volume suggests thin markets where even small orders can move the price significantly.
On-chain DEX volume is more trustworthy than CEX-reported volume, which has historically been inflated by wash trading (buying and selling to oneself to fabricate activity). Blockchain analytics firms track organic vs. artificial volume.
Volume-to-market-cap ratios and volume trends are used by traders to confirm price moves: a price rise on high volume is considered more significant than one on thin volume.