So, I’ve been diving into the fascinating world of cryptocurrency lately, trying to wrap my head around some of the metrics that traders use to evaluate coins and exchanges. Two terms that kept coming up were liquidity and volume percentage. They seemed straightforward at first, but when I started comparing exchanges things got interesting. Let me break it down for you in simple terms.
Liquidity: Why It Matters

First, let’s talk about liquidity. It’s all about how easy it is to buy or sell a coin without causing a big change in its price.
High liquidity means you can trade a large amount without the price swinging wildly.
Low liquidity? You’re likely to see some significant slippage. Basically, you’ll end up paying more or selling for less than expected.
Not ideal, right?

Exchanges are given a liquidity score for each coin to reflect this. A higher score means better trading conditions.
Think of it like going to a supermarket versus a small corner store. The supermarket has plenty of stock and options, so you’re more likely to find what you need at a good price.
Volume Percentage: Where the Action Is

Volume percentage, on the other hand, shows how much of a coin’s total trading activity happens on a specific exchange.
If an exchange has a high volume percentage, it’s clear that’s where the majority of traders are active.
This can be due to various factors: lower fees, regional popularity, or specific features that attract users.
Comparison Liquidity VS Volume
Here’s where things get interesting. Let’s look at the numbers:

Exchange 1
Liquidity Score: 601/1000 (high)Volume Percentage: 11.39%
Exchange 2
Liquidity Score: 434/1000 (moderate)Volume Percentage: 20.30%
At first glance, these numbers might seem contradictory.
Why does Exchange 1, with its high liquidity score, have a lower volume percentage? And why does Exchange 2, which has lower liquidity, account for a bigger share of trading activity?
Breaking It Down

Exchange 1 high liquidity score means that trades can happen smoothly and with minimal price impact.
If you’re someone who needs to trade large amounts without worrying about the price shifting too much, Exchange 1 is your go-to platform.
However, only 11.39% of the total trading volume for the coin is happening there.
This suggests that while Exchange 1 provides excellent trading conditions, it’s not the most popular platform for this coin. Maybe the fees are higher, or traders just prefer other exchanges.

Exchange 2 on the other hand, handles a whopping 20.30% of the coin’s total trading volume. That’s nearly double! But its liquidity score is lower, meaning trades might experience more slippage.
So why are more people trading here? It could be due to lower fees, regional preferences, or specific incentives that Exchange 2 offers to traders.

What Does This Mean for You?

If you’re trying to decide where to trade, here’s my advice:
For Large Trades:
If you’re moving a significant amount of money, go for a platform with a high liquidity score. Exchange 1 would be the better choice in this case because you’re less likely to face price slippage.
For Frequent Trading:
If you’re making smaller trades and want to be where the action is, Exchange 2 higher trading volume might make it more appealing. Just keep in mind that liquidity isn’t as strong, so you might face some price fluctuations.

Hopefully, this clears things up for you. If you’re still curious or want to dig deeper into other metrics, let me know. I’m learning too, and it’s always better to figure things out together.

Enjoy this? ♻️ Repost to help your network and follow me for more!
#Liquidations #Volume #volatility

Here's what you need to know
Candlesticks tell you the story of price action:
The body shows opening and closing prices
Lower wick = lowest price reachedGreen = price went upRed = price went down
But here's what most people miss:
Volume bars are the secret sauce that validates price moves.
Think of it this way:
Price is like a politician making promises.Volume is like the number of voters supporting those promises.
The bigger the volume = the more conviction behind the move.
Key patterns to watch:
High volume + big green candle = Strong buying pressure, bullishHigh volume + big red candle = Strong selling pressure, bearishLow volume + price movement = Weak move, likely to reverseVolume increasing with trend = Trend likely to continueVolume decreasing with trend = Trend losing steam

Remember:
Price tells you what happened.
Volume tells you how meaningful it was.
📌 Save this post to reference during your next technical analysis session!
Enjoy this? ♻ Repost to help your network and follow me for more!
#candlestick_patterns #Volume