Double-digit crypto gains and trading volume — what's the connection?
Unusually high trading volume can be an indication that a crypto asset’s price is on the rise.
While the crypto markets are clearly led by the swings of Bitcoin and Ethereum, outliers are frequent — and identifying them is often what separates the average traders from the great ones.
Compared to the gains-fest of the first few months of 2021, June has been a rather bleak time for crypto investors. Digital asset prices were mostly stagnant and massive rallies were rare, leaving traders to do the hard guesswork: Which asset will do better than most others that are either going down or moving sideways?
Of many market and social metrics tracked by Cointelegraph Markets Pro platform, one proved to be especially useful this month: Average daily trading volume.
Five of the assets that recorded the greatest increase in daily volume compared with the previous month were among the biggest winners, securing double-digit dominance over both Bitcoin and the dollar.
And the correlation may not be an outlier — we saw the same pattern last month.
Trading volume is one of the components of the VORTECS™ score, Markets Pro’s algorithmic tool that relies on years of historical data to assess how healthy each coin’s current market outlook is.
As well as the score, raw numbers on unusually high and unusually low volume (relative to last month’s average) are available on Markets Pro dashboard. The Unusual Trading Volume Indicator is one tool that traders may find useful in identifying potential profit opportunities.
Here are the five coins that have seen the largest increases in average daily trading volume this month… and their monthly price dynamics.
AMP (AMP): +2,255%
30-day price change: +61.02% vs. USD, +59.32% vs. BTC
AMP embarked on a massive price hike that saw it shoot from $0.059 to $0.108 on June 14, and the trading volume followed the price closely.
Halfway through the rally, the coin popped up on the Unusual Trading Volume section of Markets Pro dashboard, alerting users that the ongoing price pump had been supported by a corresponding boost in liquidity.
The jaw-dropping increase in trading volume of more than two thousand percent was registered around the same time when the price peaked at almost 11 cents (red circle in the graph).
KEEP NETWORK (KEEP): 737.46%
30-day price change: +13.35% vs. USD, +11.28% vs. BTC
Keep Network (KEEP) hugely benefited from a series of high-profile listings this month: First came Coinbase, then Binance. The market absorbed the news before KEEP pairs began trading on these platforms, leading to the price peaking before trading volume. The highest volume of $215 million (red circle in the graph) came some 18 hours after the price touched $0.71 on June 17.
In the case of KEEP, a spike in trading volume was not a harbinger of a price increase, but at least partially a result of it.
THETA FUEL (TFUEL): 661.56%
30-day price change: +51.27% vs. USD, +48.51% vs. BTC
Theta Fuel’s strong showing this month in terms of both price and liquidity was powered by users’ anticipation of the upcoming Mainnet 3.0 launch.
Trading volume has definitely been one of the factors driving price action, as the two were moving hand-in-hand. In fact, between June 7 and 9, the growth of volume outpaced price movement, culminating minutes before the price hit the local high at $0.66 (red circle in the graph).
By that time, the Markets Pro Unusual Trading Volume indicator had been flashing for TFUEL for several hours.
PERLIN (PERL): 454.2%
30-day price change: +24.32% vs. USD, +21.92% vs. BTC
Perlin’s superior trading volume dynamics powered more than just the price movement this month. Combined with other metrics, it contributed to a series of strong VORTECS™ scores that preceded two price peaks on June 17 and 19.
The highest trading volume (red circle in the chart) came on June 17 as the asset’s value was at $0.112, bound for the high of $0.119 some two days later.
QUANT (QNT): 281.22%
30-day price change: +92.03% vs. USD, +88.56% vs. BTC
Quant (QNT) followed a price/trading volume pattern similar to that of KEEP. The coin’s price received a major boost from the news of an upcoming Coinbase listing before the actual spike in volume came along.
As visible in the graph, the high watermark of QNT’s liquidity came after the price hit the ceiling on June 16.
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Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risk including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial advisor before making financial decisions. Full terms and conditions.