Volume

Are you new to crypto? Get Started Here!

Volume is defined as the quantity of assets (stocks, currency, etc.) being bought and sold over a period of time. Volume can be separated into “buy volume” (also known as “ask volume”) and “bid volume” (also known as “sell volume”).

Because assets are bought and sold by many thousands of investors, there isn’t a single price, instead there’s a range of prices. Some sellers hope to sell quickly at $5,000 and others hope to sell more profitably at $6,000. Some buyers hope to buy immediately at $5,000 and other buyers hope to buy more affordably at $4,000.

When an asset has a lot of buy volume also known as ask volume, it means there are many, many buyers who want to purchase and are will to pay high prices. They will start purchasing at the lowest selling price, followed by the next higher selling price, followed by the next higher selling price, followed by the next higher… In other words, a lot of buy/ask volume results in higher prices.

When an asset has a lot of sell volume also known as bid volume, it means there are many, many sellers who are willing to sell at low prices just to get rid of their assets. They will start selling at the highest purchasing price, followed by the next lower purchasing price, followed by the next lower purchasing price, followed by the next lower… In other words, a lot of sell/bid volume results in lower prices.

Found a word to add? Click here to provide suggestions!

« Back to Dictionary