What is the best way to calculate the relative volume of a cryptocurrency?

3 answers

• Dec 26, 2021 · 3 years ago
  One of the best ways to calculate the relative volume of a cryptocurrency is by comparing its trading volume to the average trading volume of the entire market. This can be done by dividing the trading volume of the cryptocurrency by the average trading volume of all cryptocurrencies in the market. The resulting ratio will give you a relative measure of the cryptocurrency's trading volume compared to the market as a whole. This method helps to account for variations in trading volume across different cryptocurrencies and provides a more accurate assessment of the relative volume of a specific cryptocurrency.
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• Dec 26, 2021 · 3 years ago
  To calculate the relative volume of a cryptocurrency, you can also compare its trading volume to the trading volume of other cryptocurrencies in the same category or sector. This approach allows you to assess the relative strength of a cryptocurrency within its specific market segment. By comparing the trading volume of different cryptocurrencies within the same category, you can gain insights into which cryptocurrencies are more actively traded and have higher relative volumes compared to others. This method can be particularly useful when analyzing cryptocurrencies that are closely related or have similar use cases.
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• Dec 26, 2021 · 3 years ago
  At BYDFi, we recommend using a slightly different approach to calculate the relative volume of a cryptocurrency. Instead of comparing the trading volume to the overall market or other cryptocurrencies, we suggest comparing it to the trading volume of the specific exchange where the cryptocurrency is listed. This method provides a more granular view of the cryptocurrency's trading activity within a specific exchange and can help identify any significant deviations from the average trading volume on that exchange. By focusing on the relative volume within a specific exchange, you can gain insights into the liquidity and trading activity of the cryptocurrency on that particular platform.
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