Here is a question a lot of people puzzle over. Does the volume on a chart mean anything and if it can be of help to determine market direction.
Here is my take, in short NO the volume you see on the chart does not help in determining market direction. To understand my point of view you have to understand market dynamics. Small traders like us does not affect the market, we find a point on the chart to buy and sell at some profit or even hold it for the long term. Those with deep pockets think the same way but they trade differently. They wait for a market crash to buy lots of a coin and sell it slowly as the price goes up, they will never run out of coins to sell because as the price goes up, they can take the same amount of profit with less coin amount. They have deep pockets, they will not just buy at one price, they will cost average as the price falls.
Think of it like this chart, whales or people with deep pockets will reload when market crashes and slowly sell their coins when at profit at resistance levels. The levels are not accurate, just for illustration purposes. You can see when they buy cos of the big volume but you will never see where they sell because of small volume. Now some can argue when a market crash with big volume it is selling volume. But we have to understand for a sell trade to go through someone must be buying also. So the whales put up those buy walls and sell walls. The people selling are the ones selling into their buy walls, they are happy to buy your coins when market is crashing, because they will be the one selling the coins back to you when price rises and you want to get in because of news or indicator turning up and you want to FOMO in.
So in conclusion how does volume help in trading? Easy, when you see market crash and volume is above average on the daily chart, you can be sure some whale is buying, so join in and buy and slowly sell them off when market rise. Be happy that someone wants to sell to you at a cheap price when crashing. A low volume as market is rising has no meaning, at least in my point of view.
Disclaimer - This is for educational purpose only.