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Volume: what it confirms and what it does not
Volume does not show who won — every trade has both a buyer and a seller. It shows how many people cared, and it can only be compared with the instrument's own norm.
Volume is how many coins or contracts changed hands during a period. The first thing to do with it is unlearn reading it as buying strength. Every trade has two sides: if a million was bought, exactly a million was sold. Volume measures not direction but interest — how many people found this price important enough to act on. Direction is shown by price; volume only answers the question of how many needed it.
The only way to compare
A volume figure means nothing on its own. Is fifty million dollars in an hour a lot or a little? For one coin that is a quiet night, for another the event of the year. And even within one coin, volume follows a daily rhythm: the Asian night and the US open differ several times over. So volume is compared only against its own norm — the same hour of the same instrument over the past few weeks.
Median, not average: a single spike on a news day lifts the average so much that every ordinary hour becomes "below normal". The same hour, not the whole day: otherwise every Asian night looks like a lull and every US open like a surge, and you end up reading the time zone instead of the market. The resulting number reads simply: 1.0 is an ordinary hour, below 0.7 means the market is not interested, above 2 means people who are usually not here have arrived.
Two breakouts of the same level
A coin spent three weeks between 2,280 and 2,410. The first exit upward: the hour closed at 2,448 on 61 million, against 86 million normal for that hour — relative volume 0.7. That is, the level that had held price for three weeks was crossed with interest BELOW normal: there was nobody to follow it through. Two hours later price was back at 2,380, inside the range. The second exit a week later: a close at 2,455 on 340 million, relative volume 4.0 — and price never came back into the range. The difference between the two cases is visible only in volume: by price they looked almost identical.
A dictionary: price and volume together
| Price | Volume | What it usually means |
|---|---|---|
| rises | above normal | the move is backed by money, continuation is more likely |
| rises | below normal | few are pushing it; such a rise is cheaper to undo |
| falls | above normal | a sell-off: there is size on the offer |
| falls | below normal | no sellers, buyers merely stepped away — an ordinary pullback in a trend |
| flat | sharply higher | somebody large is accumulating or distributing while trying not to move price |
This is a dictionary, not a set of entry rules. Every row says "usually", and that is how it must be read: volume shifts probabilities, it does not hand out answers. None of the five rows is by itself a reason to open a position.
"Big volume means a big move is coming"
Often it is exactly the reverse. A sharp volume spike at the end of a long move is a climax: the last holdouts have finally come in, and there is nobody left to buy after them. On the screen such an hour looks like the most convincing one on the whole chart, and that is precisely where people buy the top. Volume alone cannot separate a climax from the start of a move — you need context: where you are relative to the whole run. A spike after a long lull and a spike after three days of rally mean different things.
Trusting one exchange's volume
In crypto, volume is what an exchange reports about itself, and on small venues it is sometimes painted: trading with yourself costs nothing and lifts your ranking. The practical consequence is simple: look at volume where real trading happens, and preferably across several venues at once. Our data is aggregated from nine exchanges, and the disagreement between them is itself a useful signal: if all of a coin's volume comes from one unfamiliar venue, treat that number with care.
Volume on the pullback matters more than volume on the move
The most useful observation in this lesson. In a healthy uptrend pullbacks come on volume BELOW normal: few want to sell, and price drifts down simply because buyers paused. The moment a pullback arrives with above-normal volume the character changes — now people are selling in earnest, and that is the first warning, earlier than the structure of highs and lows breaks. Watching pullback volume is easier than guessing tops: you do not need to predict a reversal, only to notice that price is being sold in size.
Our volume surge is computed exactly as described above: how many times more active the last five minutes are than usual for that particular coin. The thresholds for crypto and for currencies differ — a crypto yardstick would never fire on EURUSD, whose entire daily travel is about 0.4%. The feed of impulses and surges sits next to the table and updates in real time.
Impulses and volume surgesFive breakouts, counted honestly
Take one coin and find five moves out of a range on the daily chart. For each, write down the relative volume of the breakout day: that day's volume divided by the coin's ordinary daily volume over the past month. Then mark which breakouts held and which came back inside within three days. Count separately the ones whose relative volume was below one. Five cases are far too few to conclude anything about the market, but they are enough to see whether there is a difference at all — and that is more honest than taking the rule on trust.
Volume doubled and price did not move. What happened?
Somebody large traded with somebody large without shifting price: every order found matching size right here. That is not "nothing happened" — it is a sign of serious interest on both sides at this price. This is what accumulation or distribution looks like, and such hours most often sit at the edge of a range, where one side is building a position while trying not to drive price against itself.
Why is comparing a coin's volume to bitcoin's volume pointless?
Because volume is measured in money and the instruments differ by orders of magnitude: bitcoin's ordinary hour exceeds a small coin's entire year. The comparison only tells you what you already knew — that bitcoin is bigger. The useful question is always the same: is this a lot FOR THAT COIN, relative to its own norm at the same hour. That is exactly why our surge is computed from each coin's personal history rather than from one common bar for everyone.