I think the low volume is witnessed when there no much activities in the market which could either be as a result of investors uncertainty about the market direction and so they stay off for the main time to observe. This affects the volume trade.
It is significant. It indicates where all the trade is going to or not going to.
Topic: Low volume is it significant (Read 134 times)
I have been looking at the price tables and the volume average is going down and down. Does this impact on the price or not. It seems a bit strange that the volume is going down so much. Thanks.
The total amount of coins that is being traded (trading volume) doesn't really "directly" affect the price of Bitcoin in the market, because the price will always dependent on the demand and supply, and whenever the trading volume drops it doesn't always mean that the demand are also dropping. There are times that people are just holding their coins so transactions in Bitcoin network will decrease which means trading volume will drop, this is more likely what is happening right now since there is no huge drop in price of Bitcoin. And also having a huge volume doesn't mean that the price will always go up, there might be some instances that people are selling and in that case trading volume will also increase. 
it is significant
with less volume means that its much easier for day traders to affect the price without spending much.
imagine it like this
imagine all (near) 17mill coins were on exchanges and everyone had to set a price they are willing to sell their coins for. you would see orderlines costing millions just to get to the next level(price increase/decrease)
yet with low volumes, day traders can move the price up or down for only a few hundred dollars per orderline
anyway, there are many reasons why there is low volume.
too many exchanges so that instead of say 2mill trader coins on 3 exchanges(avg 666k each) , those coins are now spread over 20 exchanges(avg 100k each)
other things are when exchanges that handle fiat are hit with some AML/KYC restriction where it becoomes suddenly harder to deposit coin or fiat due to extra paperwork and registration requirements
when exchanges claim they been hacked, traders lose confidence in all exchanges and take coins out incase their other exchange follows suit
real world events like nearing a end of a tax year or a chinese new year or christmas affects peoples spending power and peoples trading habiits change
but basically, if there is a period where volumes are low due to orderlines bing empty (people making orderlines of well under a satoshi) it becomes much easier for prices to move
with less volume means that its much easier for day traders to affect the price without spending much.
imagine it like this
imagine all (near) 17mill coins were on exchanges and everyone had to set a price they are willing to sell their coins for. you would see orderlines costing millions just to get to the next level(price increase/decrease)
yet with low volumes, day traders can move the price up or down for only a few hundred dollars per orderline
anyway, there are many reasons why there is low volume.
too many exchanges so that instead of say 2mill trader coins on 3 exchanges(avg 666k each) , those coins are now spread over 20 exchanges(avg 100k each)
other things are when exchanges that handle fiat are hit with some AML/KYC restriction where it becoomes suddenly harder to deposit coin or fiat due to extra paperwork and registration requirements
when exchanges claim they been hacked, traders lose confidence in all exchanges and take coins out incase their other exchange follows suit
real world events like nearing a end of a tax year or a chinese new year or christmas affects peoples spending power and peoples trading habiits change
but basically, if there is a period where volumes are low due to orderlines bing empty (people making orderlines of well under a satoshi) it becomes much easier for prices to move
I have been looking at the price tables and the volume average is going down and down. Does this impact on the price or not. It seems a bit strange that the volume is going down so much. Thanks.
It is significant in that it means that the recent rise in price is down to traders/speculators and not new money coming in, as in November and December.
I have been looking at the price tables and the volume average is going down and down. Does this impact on the price or not. It seems a bit strange that the volume is going down so much. Thanks.
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