It’s been a good day for the cryptocurrency market with lots of green numbers in the mix. And Tron’s performance has been among the best on a perfect day.
The trading volume for TRX has been above the USD 1 billion mark in the last 24 hours. While this is not a rare thing for Tron (it had surpassed the billion level only 14 days ago). It’s excellent news for the project as well as for TRX holders and in this article, we’ll explain to you briefly why.
Traders, professional or otherwise, have a set of tools to observe and construe the cryptocurrency market. The best-known among them is technical analysis (which despite the name is neither that technical or scientific) which is a set of rules that, based on past market behavior, are supposed to be able to forecast or explain current and future behavior. These techniques are hit or miss, which means that none of them works 100% of the time.
The trading tools we refer were not developed with digital assets in mind. They’ve been around for ages in other, more traditional markets such as the stock market or the foreign exchange market. Applying those devices to crypto means to assume that the digital currency market is intrinsically the same as Forex or the stock exchange. That is a very complicated question that we won’t tackle here, but it’s worth mentioning because, in the future, the correct answer could make all the difference.
Every resource available for technical analysts is based on an asset’s price. The price is the most crucial piece of information, and every indicator there is in the books is nothing but price data scrambled in some way or other. The core belief is that the price includes or implies everything you need to know about a tradeable item.
The problem with that assumption is that it’s not always correct, which is why there are traders who base their activities in fundamental analysis instead of technical – and another on is that price behavior is quite erratic in all markets.
Indeed, many statisticians have “proven” that prices change in purely stochastic ways and that any attempt at prediction is futile. While this could be true from a 100% scientific angle, such things as trends do exist, and some of the indicators available in technical analysis can indeed be useful to identify them.
So, it’s all about price, right? Well, kind of. There is another piece of data that traders use to confirm behavior. For instance, you could have a sudden dramatic rise in the price of a Forex trading pair (say, EUR/GBP). Would that be enough of a signal for you to jump in and start buying? It depends. The spike in price is not enough.
A rise in value can’t be considered to be genuine unless it’s accompanied by a high trading volume, and that’s why trading volumes matter so much. They are the authenticating factor for market trends, like the watermark or the hologram in a banknote. It means the market as a whole is noticing the asset and trading it. Trading volume means relevance.
And that’s why today’s trading volume for Tron’s TRX is such good news. It means that the crypto space, which is now quite optimistic and active, is noticing the token and going for it. The market for Tron is of 93% buyers as we write this, so the market sentiment is bullish. And if you doubt that, you can always corroborate by looking at the trading volume.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.