Volume Concentration

Definition ∞ Volume concentration describes the degree to which trading activity for a specific digital asset is focused on a limited number of exchanges or platforms. High concentration indicates that a significant portion of an asset’s total trading volume occurs in a few venues. This can affect market liquidity, price discovery, and vulnerability to manipulation. It is an important market structure indicator.
Context ∞ Crypto news frequently analyzes volume concentration to assess market health and potential risks associated with a digital asset. A high concentration on unregulated exchanges might raise concerns about price integrity. Shifts in volume concentration can signal changes in market preferences or regulatory pressures affecting trading venues.