Understanding the concept of “volume” of Ethereum and its implications on the price of bitcoin
When it comes to measuring the performance of cryptocurrencies such as bitcoin (BTC) or Ethereum, two usual metrics are volume and number of trades. However, these two measures are often mixed in discussions about market dynamics. In this article, we will explore what each metric represents, our differences and how they affect the price of these cryptocurrencies.
Volume: The amount of BTC -a exchanged
The volume refers to the total amount of bitcoin (BTC) to be traded over a specified period. This is basically the amount of coins that are exchanged one for or against each other. In other words, it measures the “volume” of the market transaction. Higher volume indicates greater activity and potentially greater liquidity.
To illustrate this, let’s consider the example:
Suppose the following stores happen:
Store 1: 100 BTC @ $ 75
Store 2: 0.5 BTC @ $ 76
Store 3: 100 BTC @ $ 77
Store 4: 100 BTC @ $ 78
Store 5: 100 BTC @ $ 78
There were five individual trades, but the total volume is calculated as follows:
Volume = (1 store × $ ۷۵) + (۰.۵ store × ۷۶ USD) + (2 store × ۷۷ USD) + (3 store × $ ۷۸) + (۴ stores × ۷۸ USD)
= $ ۷۵ + $ ۳۷ + ۱۵۴ + $ ۲۳۴ + $ ۳۱۲
= 870 USD
In this example, the total volume is about 870 units of bitcoin.
Crafts number: Number of completed contracts
The number of completed crafts refers to the actual number of contracts or positions exchanged. This metric takes into account each single transaction, including small such as micro stores and large offers. A larger number of crafts indicates multiple market activities.
Put this in perspective:
Store 1: 100 BTC @ $ 75
Store 2: 0.5 BTC @ $ 76
Store 3: 100 BTC @ $ 77
Store 4: 100 BTC @ $ 78
Store 5: 100 BTC @ $ 78
The number of crafts is calculated as follows:
OBRATE NUMBER = 1 store + 0.5 trades + 2 trades + 3 trades + 4 trad
= 8.۵ crafts
In this example, the total number of crafts is approximately 8.5.
Conclusion
Although the volume and number of crafts are important measuring data for understanding market activities, they represent different aspects of the performance of cryptocurrencies. The volume represents the amount of transactions, while the number of crafts measures actual contracts or exchange positions.
To illustrate the difference, consider the example:
The merchant may be more interested in moving prices (eg up or down), not for trading volume or number of stores. If the price increases by 10%, but only a few crafts are done during this period (such as trade 1), it is probably that the market is still unstable and subject to further fluctuations.
Contrary to this, if the price is significantly reduced (eg, 20% in just one day) due to a large number of crafts (8.5 in our example above), it may indicate increased liquidity and retailer.
In conclusion, understanding and the amount and number of crafts is crucial to making informed decisions to buy or sell bitcoin and Ethereum. Recognizing the differences between these measuring data, investors may acquire a comprehensive representation of market dynamics and make more effective trading strategies.
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