Trading volume

transaction amount

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Trading volume

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When it comes to trading volume, some friends may immediately think of the trading volume on the K-line chart, and the trading "volume" within the corresponding time period is generally displayed below the K-line chart.

In addition, the daily transaction "volume" will be counted on coinmarketcap:

In fact, the trading volume on coinmarketcap is obtained by calling the trading volume of each exchange through the api and then summing it up. The basis is still the exchange data.

The exchange data is actually not the real transaction volume, but the transaction value. It is denominated in US dollars, so it reflects the amount traded over a period of time, not the volume of transactions.

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The price of BTC fluctuates almost all the time within 24 hours, so it is difficult to obtain price and transaction data every moment. Therefore, based on the coinmarketcap data, Little Bee uses the opening price and closing price to simply calculate its average price. Divide the daily transaction volume by this average price to calculate the simple average transaction volume.

Simple average trading volume per day = trading volume of the day / simple average price

To put it bluntly, the transaction volume reflects how much BTC was traded, while the transaction volume shows how many BTC were traded. The trading volume is based on the price effect, which is relatively more true to reflect the market heat of BTC.

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figure 1

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figure 2

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This picture may not be obvious, and the little bee used the data from December 27, 2013 to December 31, 2018, as shown below:

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Compared with the above two pictures, the first picture is not so obvious, but the second picture is relatively obvious. Although the points on this graph are not near a straight line, we can still see that the scattered points are distributed within an angle.

The trend of this angle is to develop to the upper right. This positive correlation, because there is no specific correlation analysis, the little bee can only be called a positive correlation.

It's a chicken-and-egg question.

bull market

Perhaps there is no need to dwell too much on this issue. After all, the price rise of BTC and the prosperity of the market are mutually reinforcing.

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Never Look Back Volume

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In order to see clearly, the little bee plotted the data before 2016 and after 2017 separately.

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Figure 5

Table 1

Before 2016, the bottom of the transaction volume was obviously rising. After 2017, the bottom also rises, and the top also tends to rise.

The data since December 27, 2013 has been sorted by transaction volume. It turns out that most of the days with higher trading volume are in 2020.

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Table 1

Of the 200 most traded days, 162 were in 2020 and only 38 were in 2019.

Of the 300 most traded days, 193 were in 2020 and only 107 were in 2019.

It can be seen that the transaction volume in 2019 is very large, and the transaction volume in 2020 is even more!

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Table 2

• From the trading volume, we can see that the trading volume of BTC is booming. It was down throughout 2018, yet the average daily transaction volume of BTC is still higher than in 2017.

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rationality of trading volume

Scatter plot analysis

• There are differences between the previous two scatterplots. The main difference is that the first one is more than the second one, and it is mainly distributed in the yellow area in the figure below.

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Price vs Volume Comparison

In excel, make a line chart of the opening price and trading volume, the main coordinate on the left is the trading volume, and the secondary coordinate on the right is the opening price. Excel will automatically generate coordinates, and Little Bee will sit the peak of the 2017 bull market, that is, the data from November 2017 to February 2018, and the current stage, that is, the data from October 2020 to the present, into two line charts. Of course, the coordinates of the two graphs are unified, and the following two graphs are obtained:

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• Figure 8

Let's take a look. In the figure above, the line of opening price first intersects with the line of trading volume, and then the opening price flies away from the trading volume. Later in February 2018, the two lines came close again.

The picture below is now, the trading volume line is generally related to the opening price line.

Therefore, the current BTC market is still very rational.

Extreme Daily Volume Comparison

The largest trading volume in 2018 was December 20th, ranking only 398th, with a trading volume of 1,591,193.949 BTC;

The largest transaction volume in 2017 was on December 22, ranking only 648th, with a transaction volume of 1,493,316.445 BTC,

Let’s compare it to November 17, 2020, that is, yesterday, when the BTC price broke through $17,000, and the 24 trading volume was 2,272,391.457 BTC, which was the highest daily trading volume in 2017, which was 1.428 times that of December 20, 2017.

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The larger the transaction volume, the lower the currency price, which shows that the current market in 2020 is more rational and prosperous. As analyzed earlier, trading volume and price have a certain positive correlation, and trading volume may face higher prices.

And being more rational means that the market is not crazy yet, which means there is still potential for growth.

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write at the end

In the first half of 2005, Little Bee worked in a real estate sales company. At that time, many people who bought a house were struggling because the real estate bubble had already generated too much. However, in 2007, it was found that 2015 was the year when real estate prices rose the most. However, the story is still not over. After 2007, real estate prices continued to rise. Until recent years, the state has begun to launch policies to curb real estate price bubbles, but despite this, real estate in first-tier cities still has an upward trend.

Although it is not appropriate to use real estate to compare currency markets, because real estate has rigid demand, but cryptocurrencies do not. But from another perspective, real estate has management and regulation, but cryptocurrencies do not.

What real estate and currency markets have in common is expectations. There may be more than one foam when the desired foam has fermented.

The increase in BTC trading volume, note that this is a variable that excludes the price factor and is measured by the number of BTC. The increase in this variable indicates that the BTC market is becoming more and more prosperous.

Of course, the prosperity of the market is tantamount to nonsense. I believe that all small partners can deeply feel that the BTC market is becoming more and more prosperous.

The important thing is that in this boom, the market still retains rationality. Trading volumes are on the rise, surpassing all-time highs, yet prices have yet to reach the crazy highs of 2017. Moreover, the entire 2019-2020 appears to be more rational, and there are not many cases of skyrocketing transaction volume brought about by rising currency prices. All these show that the current currency market is still relatively rational.

You must know that against the background of institutions entering the market and global fiat currency release, the currency market is so rational, which can only show that the time is not yet ripe for 2020, and 2021 is more worth looking forward to.