Volume Doesn't Lie, But It Can Be Misleading: Basic Knowledge You Need to Know When Analyzing Projects

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When researching a coin/token project, we often focus on three main factors: Price, Supply (Supply) and Market Cap (Market Cap). But there is one extremely important factor that many people overlook or misunderstand: Trading Volume (Trading Volume). In reality, many investors – even those with experience – can still be "confused" when looking at the color of the trading volume. For example: the market is declining, prices are red all over the board… but the trading volume is green. So what is happening? 🤔 Let's clarify everything in the simplest way.

✅ What is Trading Volume? Trading Volume represents the total amount of coins bought and sold within a specific time frame, usually calculated over 24 hours. It is important to note that volume does not reflect whether prices are rising or falling, but rather indicates the level of trading activity. 🔍 When the Market is Red, Why is the Trading Volume Still Green? Imagine the market is "burning red", prices are plummeting, and market capitalization is also declining. At this time, two scenarios may occur: Scenario 1: Trust is still there Investors believe in the project, they choose to hodl ( and hold coin). No additional purchases, no sales. They wait for the market to recover. The consequence is: trading volume decreases, as there is not much buying and selling activity. Scenario 2: Loss of trust or panic mentality At this time, many people are selling off due to fear of deeper losses. Others see the low prices and jump in to "catch the bottom." Both sellers and buyers are actively engaged – leading to a significant increase in trading volume. 👉 Lesson Learned: An increase in Trading Volume does not necessarily mean that the price will rise. It only reflects that the market is very "lively" — whether due to excitement or panic. Many people see the green volume column and immediately think: "It's about to pump!". But the reality could be that the market is experiencing a massive sell-off. 😅 📌 Summary: High Trading Volume = The market is experiencing a lot of buying and selling activity ( regardless of whether prices are rising or falling ) Low Trading Volume = Investors are waiting, and not many are taking action. 🧠 Conclusion The next time you see the volume increase while the market is red, don't rush to think that the price is about to recover. Observe more carefully: Are large investors quietly accumulating? Or is it just the crowd that is running away? Don't blindly trust colors. Observe, learn, and make decisions based on data and real context. Volume doesn't lie — but it can mislead you if you don't understand its nature.

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