Total Trades are the total of all the crypto assets bought and sold in a given trading period. It can also be known as Total Volume Traded – an indicator of the number of individual units of a crypto asset that changed hands during the given period. This concept includes both - crypto trades done intraday for short-term purposes as well as crypto assets bought for long-term investing purposes.
Total Trades are used by brokers to calculate brokerage and transaction fees as a part of the transaction’s overall costs. When a buyer and a seller reach an agreement at a given price, the transaction is recorded by the crypto exchange facilitating the same. This data is then used to calculate the trading volume for the given period.
Traders and investors can use the Total Trade Volume indicator as a method to obtain a better understanding of the strength of a given trade pattern of a crypto asset. If volatility in price is accompanied by higher trading volumes, the price is said to have more validity. Conversely, if a price fluctuation is accompanied by lower trading volumes, it indicates a weakness in the underlying trend.
Price levels having historically higher Total Trade Volumes signal the traders as to when shall be the best time to make an entry or exit for a specific crypto asset. An emerging market shall see increasing trade volume, thus indicating continuous buyer interest in the crypto asset to push the prices higher. On the flip side, an increase in the Total Trade Volumes in a downward-trending crypto market may indicate mounting pressure to sell.
Higher Total Trade Volumes usually result in trade reversals, exhaustion moves, and sharp changes in price direction. Such times generally are when the highest number of buyers and sellers are active in the crypto asset market. Thus, volumes are a great moving average to determine the trading capability and capital-holding power of a crypto asset.