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Trading Volume Liquidity Indicators Meaning

Trading volume liquidity indicators are analytical tools that combine volume data with price and order book information to assess market liquidity. These indicators help determine how easily assets can be traded without significantly affecting price.

Common indicators include volume-weighted spreads, turnover ratios, and volume-at-price distributions. In crypto markets, these metrics are especially important due to varying liquidity quality across venues.

Liquidity indicators derived from volume data support better execution planning, slippage estimation, and venue selection.

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