The true meaning of volume Vol – a key indicator to judge market trends

Do you often see the indicator “Vol” in cryptocurrency trading but don’t quite understand what it means? Vol is actually the English abbreviation of trading volume, which measures how many tokens are traded over a certain time period (usually 24 hours). This seemingly simple indicator can help you make more rational trading decisions.

What exactly does Vol mean? How volume affects prices

The core meaning of the Vol indicator is the “activity” of the market. When you see a sudden spike in the trading volume of a certain coin, it means that many traders are entering and exiting the coin at the same time. This high-frequency trading activity often signals a change in price direction or that the current trend is intensifying.

In turn, if the volume suddenly shrinks and traders stand still, it usually means that market participants are not yet united in their views on the direction of the market, so the price may fluctuate in an unclear direction.

High volume vs. low volume – the difference between the two market signals

What does high volume mean?

When trading volume is high, trader engagement is high. This can be a strong buy or sell signal, depending on whether the price is rising or falling. If the price continues to rise while the volume is also amplified, it indicates that buyers are actively participating and the upward trend has real market support.

What does low volume mean?

In contrast, low volume reflects the silence of the market. Investors may be confused by the current price action and dare not make a rash move. At such times, price fluctuations are often weak, and persistence is compromised.

Trend confirmation with the help of the Vol indicator

If you want to judge whether a round of market is a real trend, trading volume is the best witness. If the price is moving in a certain direction (like bullish) but the volume is shrinking, the rally may be short-lived. But if the price increase is accompanied by a modest increase in volume, then this trend is more trustworthy.

Similarly, when the price pulls back (short-term decline) but the volume remains subdued, it often indicates that the pullback is not strong and may be absorbed quickly. Traders can judge whether they should place the dip in the pullback.

Vol combines RSI and MACD - three indicators to shoot together

The power of the Vol Volume indicator is that it does not exist in isolation. Using Vol in combination with other technical indicators will make the judgment more accurate.

Vol + RSI： The Relative Strength Index (RSI) measures price momentum. When trading volume is rising and RSI readings are higher, typically above 70, this usually signals a strong upward or downward phase in the market. At this time, whether it is chasing up or killing, traders can feel the strength of the market.

Vol + MACD： The MACD (Exponential Smoothing Average) is known as the “mother of termination” because it is good at capturing trend turning points. When the MACD line intersects the signal line while the volume is amplifying, it is often a strong signal that the price action is about to strengthen. This combination is particularly effective in judging the initiation of an uptrend or downtrend.

How to apply Vol signals in trading

Step 1: Confirm the authenticity of the trend Don’t just look at the rise and fall of the price, but also look at the trading volume in cooperation. If the rise does not bring volume, then this rise may collapse at any time.

Step 2: Look for opportunities at key price levels When the price approaches an important support or pressure level, changes in volume can often tell you the strength of the long and short sides. High volume often means that there is a main force in action.

Step 3: Be wary of signals of mismatched volume If the market is moving aggressively in a certain direction but the volume is cold, this is usually inflated. Conversely, if the volume in a certain direction is accumulating, but the price has not kept up, then the market may be in the brewing period.

Conclusion: The Vol Indicator is Your Trading “Thermometer”

In summary, the Vol volume indicator is like a “thermometer” of the market, which can tell you whether the market is too hot or too cold. Using Vol alone, you can judge market activity; Combining RSI and MACD, you can build a more complete framework for trading decisions.

The real meaning of volume vol is the attitude indicator of market participants. Learning to read Vol is like learning how to recognize the difference between a true trend and a false action. This will be a real help in improving your trading win rate.