Derivatives volume consists of the total dollar amount traded in 24-hours for perpetual swaps contracts in top exchanges. Total volume is calculated by multiplying the total number of contracts traded times the dollar value of each.

💡 How can I use it?

As is the case with spot markets, derivatives volume can act as a sign of trend strength of the price movement. For example, the high derivatives volume seen on October 20, 2020 - as Bitcoin reached $12k - points to strong conviction amongst traders. This can be a useful sign of validation for a price movement.

As well, high perpetual swaps volumes can point to potential reversals, as occurred following March 12, dubbed as Black Thursday in the crypto space. The high volume is due partially due to liquidations from volatility, but also suggests high trading activity.

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