Trading volume measures the total value of a token that has been bought and sold within a given timeframe, usually 24 hours. It indicates the level of market activity and liquidity for a particular token.
Volume is crucial for assessing the potential impact of token unlocks. An unlock of $10 million worth of tokens will have a much larger impact on a token with $5 million in daily volume versus one with $500 million. The unlock-to-volume ratio is a key risk indicator.
Abnormal volume spikes often precede or accompany significant events like token unlocks, exchange listings, or major announcements. Monitoring volume patterns alongside unlock schedules provides valuable context for anticipating market movements.