Derivatives volume consists of the total dollar amount traded in 24-hours for futures contracts in top exchanges. In the case of traditional futures exchanges such as CME and Bakkt, the volume shown is only for trading hours. Total volume is calculated by multiplying the total number of contracts traded times the dollar value of each.

πŸ’‘ How can I use it?

As is the case with spot markets, futures volume can act as a sign of trend strength of the price movement. For example, the high derivatives volume seen on October 21, 2020 - as Bitcoin surpassed $12k - points to strong conviction amongst traders. This can be a useful sign of validation for a price movement.

Similarly, futures volume can be used to spot potential tops and bottoms. For instance, let’s observe the spike in volume on September 3rd. Here the high volume marked a local bottom for the price of Bitcoin as it retraced 20%, but since continued climbing.

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