Trading volume (the amount of an asset that has changed hands in a given period of time) is one of the most important metrics that investors use to define price developments and assess the market outlook for a given currency in terms of liquidity and trader activity.
The ranking below focuses on the price of five coins where the average daily volume has increased the most for this month compared to the previous month. Most of them (but not all) have turned out to be big winners in terms of monthly returns, but the price-to-trade ratio has not always been as expected.
Data from the Cointelegraph Markets Pro platform provides more information on how these two indicators interact.
Along with several other quantitative metrics The trading volume is the core of the VORTECS ™ score. An algorithmic comparison of historical and current market conditions derived from billions of data points collected and analyzed by a proprietary machine learning model.
Polygon (MATIC): volume increase of more than 643.79%
Take advantage of the growing activity in the DeFi sector and the expansion of the number of projects that appear on its platform. Polygon has had an impressive month, hit one all time high (ATH) after another. The coin gained 329% against the US dollar and 456% against BTC, while the average daily volume increased 643%.
The dynamics of trading volume faithfully followed each price increase and reached an impressive figure of $ 11 billion on May 19. On that day, MATIC made up no more and no less than 4.5% of the total trading volume of the cryptocurrency market.
A look at the VORTECS ™ score chart shows that trading volume peaks were an integral part of every MATIC leg with ultra high scoring played that month (red circles on the chart). These dark green sequences, in turn, heralded each new leg of the currency’s impressive rise.
Ethereum Classic (ETC): Volume increase of over 229.23%
A chain inherited from the original Ethereum network and abandoned by much of the community after the DAO theft in 2016. ETC has a small but enthusiastic fan base and an uncertain reputation on the network.
Watchers disagree on the exact cause of the 300% rise in ETC price, closely followed by the rise in trading volume in the first week of May. Opinions range from users suddenly looking for cheaper alternatives to the main Ethereum network to new investors who consider the coin to be its better known premium.
Anyway, at the height of its rally on May 6, ETC had a surprising 15.9% of the total trading volume of the cryptocurrency market, which isn’t bad at all for a coin that has been brought back to life after years of oblivion.
According to the VORTECS ™ score table, ETC’s appearance was not only unexpected, it was unprecedented in history. The mix of market and social conditions that preceded the currency’s launch was not comparable to those that consistently preceded ETC’s price hikes in the past, as evidenced by the mostly neutral VORTECS ™ scores.
Telcoin (TEL): Volume increase of over 507.8%
Telcoin, a global remittance platform whose tokens rose 437% against the US dollar and 600% against Bitcoin over the past month, owes at least part of its success to Polygon’s spectacular surge. The most likely reason for TEL’s surge in early May was the migration to the most cost-effective Layer 2 of the Polygon network and the subsequent inclusion of the token in QuickSwap, which opened up attractive terms for liquidity providers.
As can be seen from the graph, it was the QuickSwap timing that caused the largest spike in TEL trading volume, rather than the even larger price spike that occurred a few days later.
It was the same surge in business between May 2nd and May 8th that the VORTECS ™ algorithm picked up and, along with other constitutive metrics, deemed worthy of a number of high VORTECS ™ scores that began to rise. Flash three days before the last leg of the price increase.
iExec RLC (RLC): Volume increase of over 1,153.62%
RLC, the native token of the cloud computing platform iExec, showed the highest month-to-month average daily volume growth, increasing an astonishing 1,153% over the previous 30-day period. The price of the coin began to rise after the announcement of its arrival on Coinbase Pro on May 4th and was further fueled by a cascade of new listings on major exchanges, partnerships and collaborations, as well as the announcement of a reward for program developers. During the month, the RLC token gained 200% against the US dollar and nearly 300% against Bitcoin.
As the graph from data analysis company The TIE shows, the trading volume indicator on May 8th and early May 9th reflected the sharp rise in price movement with a delay of a few hours. The two lines were subsequently merged, suggesting that the surge in trading volume was no longer solely due to price movements, but was responding to news and independently raising sentiment about the currency.
As you can see from the graph, The RLC VORTECS ™ score had been neutral (yellow) in the days before the currency’s rise and became moderately bullish (light green) for a short time during the rally. However, when both price and trading volume peaked, the VORTECS ™ score returned to the uptrend and to the neutral position (red boxes in the graph), meaning that these rallies in the past both price and also did not track the trading volume constantly up or down through the price.
In summary, This month’s RLC series didn’t have a clear historical precedent in terms of market regularities and social media activity for the VORTECS ™ score to capture. Rather, it was fueled by a series of bullish news. This is where another element of Markets Pro functionality comes into play, NewsQuakes ™: On the same chart you can clearly see two listing announcements, Coinbase Pro and Bithumb (red circle in Fico chart), just before the price increase.
OKB Token: Volume increase of over 253.28%
Average daily volume for OKB, the native token of the OKEx exchange, rose more than 250% this month. However, this did not lead to a corresponding increase in the price of the utility token: in the same 30 days OKB lost 18.76% against the US dollar and gained only 4.89% against the ailing Bitcoin.
A look at the chart of token price versus trading volume provides an explanation for this discrepancy. While trading volume largely mirrored price movement in the first half of the month, the two diverged sharply between May 19 and May 20, when the market fell. As the price fell, the volume of trade increased.
The key to this seemingly paradoxical dynamic lies in the nature of the asset. In order to keep the value of the token high, OKEx reduces the supply of OKB every three months by buying back the burning of a few million coins. Given that the current burnout period expires in late May, it is likely that some traders have bet that the OKB would stay afloat thanks to the guaranteed buyback liquidity if other digital assets collapsed. Indeed, an increase in trading volume supported a brief rally, which was only able to last for a few days. before the asset started falling again.
Note that the VORTECS ™ algorithm was not affected by the increase in trading volume on May 20th as the score remained neutral. As a model who is constantly learning, you’ve surely seen spikes of this type that were inspired by burning tokens, and apparently those spikes didn’t always mean significant ones in the past Price increases.
Any single metric describing an asset’s market outlook may in itself not be informative or even misleading, but becomes exponentially more useful when contextualized within the recurring patterns of the asset’s other metrics. VORTECS ™ algorithm (including price action, sentiment and tweet volume).
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