| Courtesy Token Terminal
As crypto markets continue to reach new all-time highs, we expect trading volumes to increase as well. While that's been the case recently, it wasn't true for much of February. Why is that?
As I'm sure you know, there's been increased volatility over the past week, with bitcoin and other tokens reaching new highs and then pulling back. That selling pressure is also trading volume.
It seems that much of February saw investors accumulating. Still, we are also seeing some selling pressure (likely from profit-taking), causing large spikes in trade volumes and the accompanying volatility.
Our chart shows the top four cryptocurrencies by market cap, and we can see the correlation in most markets as tops are hit. The outlier here is Binance Coin (BNB), which doesn't see the same trade volume increase as the others in this small group.
Trading volume is an important metric to watch, as any increase in volume is often accompanied by an increase in price and price momentum. Conversely, once volume begins to decline a pullback in price is almost sure to occur. | 