Trader Involvement

Definition ∞ Trader Involvement refers to the extent and nature of participation by individual and institutional investors in the buying and selling of financial assets within a market. This includes the volume of trades, the types of strategies employed, and the demographic characteristics of active participants. High trader involvement often correlates with increased market liquidity and volatility. It is a key metric for assessing market activity and sentiment.
Context ∞ In crypto news, trader involvement is a frequently analyzed metric to understand market sentiment, predict price movements, and assess the overall health and maturity of digital asset markets. Reports often distinguish between retail and institutional trader involvement, noting how shifts in either group’s activity can influence market trends. Increased institutional participation, for example, is often viewed as a sign of market maturation and broader acceptance of cryptocurrencies as a legitimate asset class.