Super simple and easy Bitcoin trading methods, remember to bookmark
First tip: Trading volume is the guiding light for price trends
Supply and demand, technology, policy, and money supply are undoubtedly the main factors affecting the price of digital currencies. However, the ultimate force that determines the rise and fall on a given day is the trading activity of the market itself. No negative or positive factors can outweigh the activity of capital transactions. The directional indicator role of trading volume is particularly evident in real transactions. Here’s a very accurate mnemonic to share: When trading volume increases and prices rise, there’s still room for growth: When trading volume increases and prices fall, there’s still room for decline: Be cautious of sudden large trading volumes at high price peaks, as it may signal a sharp drop: Sudden large trading volumes at low prices are likely to indicate significant future gains.
Price trends indicate direction while trading volume indicates momentum. Since trading volume is the sum of buy and sell contracts. High trading volume does not necessarily mean more buyers or more sellers. An upward trend simply indicates that buyers are willing to transact at higher prices, while a downward trend indicates that sellers are willing to transact at lower prices. Momentum and direction are two different things and should not be confused; only then can volume-price analysis serve as a guiding light for our predictions about the market's future.
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