The Volume/Market Cap indicator (often called Volume Turnover) is a key metric that tells you how active and liquid a cryptocurrency is right now relative to its total size.

In the simplest terms, it asks: "How much of this coin's total value changed hands in the last 24 hours?"

Here is a breakdown of the two parts and the ratio itself:

The Two Components

Market Cap (The Size)

Think of Market Cap as the total size of the "company" or, in this case, the crypto coin.

How it's calculated: Current Price per Coin × Total Number of Coins in Circulation.
What it tells you: It's a measure of the crypto's overall value and stability. Large-cap coins (like Bitcoin) are like large, slow-moving ships - they take a lot of effort (money) to move their price significantly.

24-Hour Volume (The Activity)

Think of Volume as the total cash value of all trading activity for that coin over the last day (all the buying and selling).

What it tells you: It measures interest and liquidity. High volume means a lot of people are actively trading it, making it easier to buy or sell quickly.

The Ratio: Volume / Market Cap %

The ratio combines these two to give you a percentage that indicates the turnover rate.

Volume/Market Cap = (24-Hour Trading Volume / Market Capitalization ) x 100

What the Percentage Tells You:

A High Percentage (e.g., 50% or more): This is like a tiny boat sailing in a storm. It means a very large portion of the coin's total value was traded in a single day.
- Signal: The coin is extremely liquid, volatile, and high-risk. It suggests very high investor excitement (or panic) and a lot of speculation. The price is easier to move up or down dramatically.
A Low Percentage (e.g., 5% or less): This is like a slow-moving freight train. It means the coin's trading volume is a small fraction of its total value.
- Signal: The coin is relatively stable and less volatile. It’s common for large, established coins (like Bitcoin or Ethereum) to have lower percentages because their total market cap is so massive.

Essentially, Volume/Market Cap indicator measures how much of the coin's foundation is shifting each day.

A stable coin has a big, solid foundation (Market Cap) and only a small amount of activity on top (Volume), resulting in a low percentage.

https://www.dbm.academy/faq for more blockchain vocabulary.

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