Trading Activity

Definition ∞ Trading activity refers to the volume and frequency of transactions involving digital assets on exchanges or decentralized protocols over a specific period. This metric provides insight into market liquidity, investor interest, and the overall health of a cryptocurrency or the broader market. High trading activity often indicates strong market participation and price discovery, while low activity can suggest stagnation or declining interest. It encompasses all buying and selling actions executed by market participants.
Context ∞ Crypto news regularly reports on trading activity, analyzing trends in daily volumes, open interest, and the flow of funds across different platforms. Discussions frequently address the impact of regulatory announcements, macroeconomic factors, and technological developments on market participation. Significant shifts in trading activity can signal impending price movements or changes in market sentiment. Understanding these patterns is crucial for market analysts and participants seeking to gauge market momentum.