Why activity should be compared with an asset’s normal level.
Raw volume becomes useful only when compared with normal activity. Relative volume divides current volume by an average for a comparable period.
| Observation | Possible meaning | |---|---| | Relative volume below 1.0 | Current trading activity is below the comparison average. | | Relative volume near 1.0 | Activity is close to normal. | | Relative volume above 1.0 | Activity is elevated. | | Large volume spike | May indicate news, institutional activity, panic, speculation, rebalancing, or forced liquidation. |
Volume figures are not always directly comparable across stocks and crypto. Crypto trades across many venues, and reported volume quality can vary.