Trading Volume Spike

Definition ∞ A trading volume spike signifies a sudden and substantial increase in the number of assets exchanged within a specific period. This surge in activity often accompanies significant price movements, indicating strong market interest or a reaction to new information. It can suggest a consensus among market participants regarding an asset’s value or a major shift in sentiment. High trading volume provides greater liquidity, allowing larger orders to be executed with less price impact.
Context ∞ Trading volume spikes are closely monitored in cryptocurrency news as key indicators of market health, asset interest, and potential price reversals. Analysts frequently interpret these spikes in conjunction with price action to identify strong trends or exhaustion points. A sudden increase in trading volume can precede or confirm major market events, offering insights into market dynamics.