The daily trading volume refers to the total amount of Bitcoin that has been bought and sold over the past 24 hours. This metric can vary across different exchanges, but data extracted from the major platforms can provide a general picture of the market’s state. A sudden increase or decrease in trading volume typically signals an important event or a shift in traders’ sentiment.
The daily trading volume of Bitcoin and its relation to price prediction
Empirical research on the daily trading volume of Bitcoin has shown that it is one of the most important indicators in the Bitcoin market, directly influencing predictions of Bitcoin price trends, especially when the Bitcoin market is experiencing high volatility.
The research has shown that an increase in trading volume during a price rise is generally seen as a signal of the continuation of the upward trend in the market, while a decrease in trading volume, while prices are rising, is a sign of weakness and the potential reversal of prices.
This chart shows that there is a close relationship between daily trading volume and the price of Bitcoin. In this chart, we can see that when trading volume increases, the price also rises, as seen in the final days of the chart. Therefore, this can be interpreted as a sign of new buyers entering the market and strengthening the bullish trend. In contrast, on some days when the price of Bitcoin has increased but the trading volume remained low, like in the middle days of the chart, there is a potential for weakness in the trend and even a price reversal. Overall, this chart shows that trading volume can confirm or warn about the strength or weakness of the price trend, and simultaneously analyzing both factors greatly helps traders gain a better understanding of market behavior.
How does Bitcoin’s daily trading volume determine market trends?
Bitcoin’s daily trading volume is used as one of the most important technical analysis indicators in the cryptocurrency market, which can provide significant signals about the direction of price movement in the future. But why is this number so important, and most importantly, how does it define the market trend? To answer this question, we need to explore its four key reasons.
Trend Confirmation
One of the primary uses of trading volume is to confirm price trends. In classic technical analysis, when the price is rising and trading volume is also increasing, it is a sign of buyer strength and the continuation of the bullish trend. Similarly, if trading volume increases in a downtrend, it indicates seller strength and the likelihood of a continued price drop. Conversely, if a trend is accompanied by low volume, it is usually considered weak and may lead to a reversal or correction.
Identifying Reversal Points
At times, a sudden increase in volume at a specific price level can be a sign of a market direction change. For example, if Bitcoin is falling in price and suddenly experiences a sharp increase in volume at a support level, it could indicate the entrance of buyers, which may lead to a price reversal.
Market Whales
A significant increase in Bitcoin’s daily trading volume can signal the activity of market whales (large and influential buyers). Whales can greatly impact the market by entering or exiting large amounts of Bitcoin in a short period. Observing such volume at specific times (for instance, before major economic announcements or central bank decisions) can give traders a relative prediction of big, planned movements behind the scenes.
Comparison with Historical Averages
Another method of analyzing volume is to compare it with the average trading volume from past periods. If today’s volume is much higher than the average of the previous month, it’s likely that we are witnessing a significant event in the market. This analysis helps traders differentiate between normal fluctuations and those backed by strong movements.
Bitcoin’s Daily Trading Volume as a Trading Signal
Bitcoin’s daily trading volume serves as an analytical factor for traders, helping them understand market sentiment over a specific period and make better decisions for determining entry and exit points in their trades.
In technical analysis, any price movement without supporting volume is considered suspicious. Therefore, if an increase or decrease in Bitcoin’s price is accompanied by a significant rise in daily trading volume, this change not only gains more credibility but can also be interpreted as a signal for the continuation of the trend or a valid breakout of a level.
On the other hand, a decrease in volume during an uptrend or downtrend can be a sign of trend weakening and can issue a potential reversal signal. This definition makes daily trading volume not just a number, but an active signal for making trading decisions.
In the chart above, the relationship between Bitcoin’s price and its daily trading volume over a two week period is displayed. The blue line represents the price movement of Bitcoin, which, through its daily fluctuations, illustrates the overall market trend. On the second axis, the gray bars indicate the daily trading volume. An increase or decrease in this volume can provide signals about the strength or weakness of the price trend. For example, a price increase accompanied by low volume may indicate an unsustainable bullish trend, while a rise in volume along with a price increase lends more credibility to the trend.
In this chart, the point with the highest trading volume is prominently marked. This point typically holds significant technical analysis value, as it can act as a reversal zone or a strengthening of the trend. In situations where a sudden volume spike coincides with a notable price change, the likelihood of a market direction change increases. Analysts examine such areas to make decisions regarding entering or exiting trading positions. This chart effectively shows that trading volume is not just a number, but a key tool for understanding the collective behavior of the market.
Disadvantages of Bitcoin’s Daily Trading Volume
There are the following disadvantages regarding Bitcoin’s daily trading volume:
Incorrect Information
Some exchanges modify the information and trading volumes they provide, presenting them in an opaque manner. This particularly occurs in exchanges without reliable regulation, leading to the dissemination of misleading data.
Non Alignment with OTC Transactions
Over the counter (OTC) transactions involve the trading of assets outside of public exchanges and privately between two parties with large volumes. These transactions are not included in daily trading volume statistics, leading to a lack of transparency in market trends.
Artificial Patterns
The inherent volatility with high noise in the Bitcoin market is another disadvantage of analyzing this cryptocurrency, as it can create false fluctuations and artificial patterns
Bitcoin’s Daily Trading Volume in 2025
Bitcoin’s daily trading volume in 2025 is experiencing significant growth. Currently, the 24 hour trading volume of Bitcoin ranges between $25 billion to $32 billion, indicating an increase in market activity and greater attention from traders towards this cryptocurrency.
This increase in trading volume could reflect a growing confidence from institutional players in Bitcoin. Specifically, in recent months of 2025, a notable number of large public companies, such as Twenty One Capital and GameStop, have begun adding Bitcoin to their treasuries. This trend not only signals greater acceptance of Bitcoin by institutional players but also contributes to enhanced liquidity and market depth, which could provide better trading opportunities for traders.