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Volume Meaning

Volume refers to the number of units or the total value of an asset traded within a specified timeframe. High volume signals strong interest and liquidity, enabling traders to execute large orders without significantly affecting price.

Low volume suggests lower liquidity and may result in wider spreads and more slippage. Volume is often used in combination with price indicators to confirm trends and identify momentum; for example, rising prices accompanied by increasing volume may indicate a strong bullish trend.

In on-chain analysis, volume metrics can distinguish between genuine economic activity and wash trading or other manipulative practices.

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