How to use CoinMarketCap for Volume?

Heisenberg_Hunter

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Quote from: Jetheat on April 03, 2020, 01:59:18 PM

ok, and how would you use the market capitalisation figure to make trading decisions.

This is completely subjective and differ from trader to trader. The cap and demand is directly proportional to each other and whenever there is a demand you would be seeing a steep increase in market cap and vice versa. For example, when a government legalizes bitcoin or a news which favors for the rise of bitcoin price there would be a rising demand in the country for bitcoin and certainly we would see people rushing to buy them. This was one of the key situations which made the 2017 bull run to happen on a global level.

But well, 2017 was completely driven with speculations on the other hand.

Quote from: Jetheat on April 03, 2020, 01:59:18 PM

What can that tell you if you saw that increasing?

As I have said above, supply and demand is inversely proportional to each other. When a coin is halving i.e mining rewards breaking into half we would be generally seeing a rise in price over longer term. Arbitage trading is another practice where you can gain profits while trading through different exchanges.

P.S Have a read on how trading and crypto markets works through various books.

Jetheat

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ok, and how would you use the market capitalisation figure to make trading decisions.

What can that tell you if you saw that increasing?

Once again, is there a way to tell that it is increasing in real-time?

JH

jackg

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https://bit.ly/387FXHi lightning theory

Quote from: Jetheat on April 03, 2020, 01:37:07 PM

If a trader says "volume has been building steadily during the day", do you think he's been monitoring the 5 minute chart and seeing larger and larger spikes on the volume indicator?

I haven't heard peopel use a 5 minute chart. 1 minute, 15 minute, 1 hour and 4 hours would be my focus for trades during the day. A volume increase over the 24 hour period probably means they've compared it to yesterday or that they've seen a recent spike that's been gorwing.

The language people use - espeically traders - is extremely subjective and normally based on what they want others to think they're doing.

TryNinja

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Quote from: Jetheat on April 03, 2020, 01:37:07 PM

So really, you cant monitor any volume changes every 5 mins from the CMC site?

They do not have an option "alert me when volume changes" or anything similar. The volume also doesn't change in real time and the history of volumes is limited to daily, so CMC is terrible for that. Why use them when you can just monitor the exchanges, which is where the action is happening?

Quote from: Jetheat on April 03, 2020, 01:37:07 PM

If a trader says "volume has been building steadily during the day", do you think he's been monitoring the 5 minute chart and seeing larger and larger spikes on the volume indicator?

Probably. And I'm pretty sure no big trader checks this data on CMC, lol. Maybe for general data (daily volume, exchanges that have pairs with it, etc...), but not active trading. They see the graph and data directly in the exchange's pair page.

Jetheat

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So really, you cant monitor any volume changes every 5 mins from the CMC site?

If a trader says "volume has been building steadily during the day", do you think he's been monitoring the 5 minute chart and seeing larger and larger spikes on the volume indicator?

JH

Heisenberg_Hunter

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Quote from: Jetheat on April 03, 2020, 01:01:09 PM

Nah, I heard traders monitoring CMC itself for sudden changes in volume and I wanted to know how they do that.

As far as CMC is concerned, they would be displaying the average of various global exchanges. Hence, it would take time for the volume to completely change as each exchange prices are never interconnected to each other the exception being some low value pump and dump coins. These coins do have varying percentage of trades, volumes and prices. CMC receives its data from various API which the exchanges offer for price and volume tracking and this is probably how CMC would end up with a volume or the average price of coin.

The volume is calculated on the basis of trading happened over in a particular exchange in the past 24 hours. Once they see a pump in volume in various exchanges, the average would be calculated and updated in 24 Hour Volume Report and summing up the various 24 hours they would end up with Monthly Report

This is done pair-pair and coin to coin. So a complex and sophisticated system would be running at the backend of the website.

Some additional info from how volume is being calculated in CMC :

Quote from: https://support.coinmarketcap.com/hc/en-us/articles/360034116491-Market-Data-Cryptoasset-Rank

(2) Volume (Market Pair)
The volume for each market pair is calculated by taking the 24h volume reported directly from the exchange in quote units, and converting it to USD using CoinMarketCap’s existing reference prices. Let’s take LTC/BTC market as an example:

Let (E) be the 24h volume of LTC/BTC reported directly from the exchange in quote units.
Let (C) be the last known reference price of BTC from CoinMarketCap in USD.
Let (D) be the derived volume reported on CoinMarketCap for the market.

For this example, let (E) = 100 BTC and let (C) = 10,000 USD / 1 BTC.

D = E * C
D = (100 BTC * 10,000 USD / 1 BTC) = 1,000,000 USD

Therefore, the derived volume for LTC/BTC on this specific market pair is $1,000,000 USD.

TryNinja

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Can’t you just see the volume change and history by looking at the graph on the coin’s page?

Eg: https://coinmarketcap.com/currencies/bitcoin/

Then, you can maybe make a script that scrapes (from the API) the volume of the main coins every X period of time and show in a table which ones had the biggest change.

Is this the better solution? Probably not since they update that once a day. Doing that directly from the main exchanges API should be better than using CMC as a intermediary, as you get the data in real time and you can see where the volume is concentrated.

Jetheat

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Nah, I heard traders monitoring CMC itself for sudden changes in volume and I wanted to know how they do that.

JH

jackg

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https://bit.ly/387FXHi lightning theory

If volume insteases for a coin there's a greater chance of arbitrage trading (trading the gap between exchanges) and there's more of a chance the coin will get noticed by others.

I don't know if anyone actually follows volume on coin market cap though. I'd use other websites like trading view with a specific asset to track volume changes over time...

Jetheat

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I heard traders monitor CMC for sudden changes in volume for a given coin.

All I see if a fixed number.

How do traders monitor the volume on CMC and see changes happening?

Appreciate the help,

JH

Topic: How to use CoinMarketCap for Volume? (Read 162 times)