Derek Sorensen Op-Ed: CoinCodex
If you’ve never looked at Bitcoin BTC, -2.25% price and volume graphs side by side, you may want to take a glance. If you adjust the vertical axes you might notice that the graphs look awfully similar. If you tune it just right, you’ll see even more—that the graphs are actually almost identical.
This is interesting, because trading volume, in general, does not have a relationship with the price of a capital asset. Volume can go up and down, fluctuating substantially, without the price changing at all. It is true that low volumes can make the price quite volatile, but at massive volumes like that of bitcoin, this is no problem. For anyone looking at the data, this is sure to inspire an interesting question. Why do volume and price move so closely in tandem? What might be causing this phenomenon?