1/ Volume analysis on $BTC is often useless and misleading.
Here is why.
- Volume is calculated per paired crypto/currency.
- Volume is calculated at an exchange level.
- More exchanges the less accurate the data. #Bitcoin #CryptoAnalysis
Here is why.
- Volume is calculated per paired crypto/currency.
- Volume is calculated at an exchange level.
- More exchanges the less accurate the data. #Bitcoin #CryptoAnalysis
2/ -- HOW ITS CALCULATED --
Volume is calculated at an exchange level, which means that the volume indicator differs from exchange to exchange.
Volume on #Binance may be different to #Gemini or #Kucoin. Gemini's clientele are predominantly Americans, Binance bans Americans.
Volume is calculated at an exchange level, which means that the volume indicator differs from exchange to exchange.
Volume on #Binance may be different to #Gemini or #Kucoin. Gemini's clientele are predominantly Americans, Binance bans Americans.
3/ -- HOW ITS CALCULATED cont --
The difference doesn't stop at nationalities. Each exchange targets different levels of investors and appeals to different types of traders.
It makes sense that BTC volume will differ between exchanges.
The difference doesn't stop at nationalities. Each exchange targets different levels of investors and appeals to different types of traders.
It makes sense that BTC volume will differ between exchanges.
4/ -- HOW ITS CALCULATED cont --
The differences go deeper than this. Volume is also calculated at a pairing level. On Binance volume for BTCUSDT, BTCUSD, BTCUSDC and all other pairings will be different.
Volume is not aggregated, which is why it's so different in the imgs above
The differences go deeper than this. Volume is also calculated at a pairing level. On Binance volume for BTCUSDT, BTCUSD, BTCUSDC and all other pairings will be different.
Volume is not aggregated, which is why it's so different in the imgs above
5/ -- BEST FEED FOR VOLUME --
CMC shows volume per pairing on an exchange. BTCUSDT on Binance represents 6% of all tracked volume, making it the best feed, but it is still only a 6% sample size.
If you use a KuCoin chart for vol, it's only 1.47%. A Bitfinex chart 0.58%
CMC shows volume per pairing on an exchange. BTCUSDT on Binance represents 6% of all tracked volume, making it the best feed, but it is still only a 6% sample size.
If you use a KuCoin chart for vol, it's only 1.47%. A Bitfinex chart 0.58%
6/ -- FAULTY LOGIC --
If you are basing trading decisions on volume data on a FTX chart, you are only seeing a tiny slither of actual volume, 1.61%.
Does that seem like a sound decision? If you were to aggregate the top 10 volume feeds, it might be completely different.
If you are basing trading decisions on volume data on a FTX chart, you are only seeing a tiny slither of actual volume, 1.61%.
Does that seem like a sound decision? If you were to aggregate the top 10 volume feeds, it might be completely different.
7/ -- FAULTY LOGIC cont --
Next time somebody tells you volume is dropping, make sure you ask them what data they are using. If they are using a BITPANDA BTCUSD chart that represents 0.01% of all volume, maybe they have no idea what they are doing.
Next time somebody tells you volume is dropping, make sure you ask them what data they are using. If they are using a BITPANDA BTCUSD chart that represents 0.01% of all volume, maybe they have no idea what they are doing.
8/ -- THE SOLUTION --
Aggregated volume from the top 20 feeds would show > 20% of BTC volume. While 20% is still a small picture it is 10x-40x greater than the volume fees most traders are looking at.
Aggregated volume from the top 20 feeds would show > 20% of BTC volume. While 20% is still a small picture it is 10x-40x greater than the volume fees most traders are looking at.
9/ -- AGGREGATE FEEDS --
Does anybody know any good aggregated volume feeds?
Does anybody know any good aggregated volume feeds?
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