About Volume

The Volume Dashboard is OCM's unified framework for analysing trading volume, liquidity, and capital flow across the top 25 cryptocurrencies. Volume is one of the most underrated signals in crypto analysis: **price moves on thin volume rarely sustain**, whilst price moves backed by elevated volume typically mark durable regime changes. This dashboard converts raw volume data into six distinct analytical lenses that reveal different aspects of liquidity and flow. **Density Nodes** applies Kernel Density Estimation (KDE) to historical price levels, identifying where the market has spent the most time. The output is a horizontal density profile on the right side of the chart with three configurable bandwidths (Tight / Std / Smooth), automatically detecting the Centre of Gravity, Upper Node, and Lower Node, rendered as shaded bands on the price chart. **Volume** renders daily BTC or altcoin trading volume with a teal-green gradient intensity mapped to magnitude, available in smooth (7-day SMA) or raw (daily bars) display modes. **Volume Momentum** measures the 30-day average daily volume against its own trailing 365-day (1Y) average, expressed as a single ratio. A reading of 1.0× means recent participation is running exactly in line with the yearly baseline; readings above signal participation heating up, readings below signal it cooling. The series renders as a plasma-gradient ribbon over a log price axis (deep indigo when volume is dormant, magenta around the yearly average, warm amber when volume is surging) with a dashed 1Y AVG reference line at 1.0×. Colour is mapped on a fixed 0.5×-2.0× scale so its meaning stays constant across assets and timeframes, and the view works for any tracked asset with at least one year of volume history. **Flow Index** is a proprietary BTC-only liquidity indicator computed from the stablecoin market cap's 365-day YoY growth rate relative to its own 30-day-lagged YoY rate, isolating whether the stablecoin inflow *pace* is accelerating or decelerating. Green bars indicate liquidity expansion, red bars contraction. **Correlation** plots the 90-day rolling Pearson correlation between an asset's 365-day YoY price change and stablecoin supply's 365-day YoY change, revealing whether the asset's price is being driven by broader fiat-onchain capital flow or by idiosyncratic factors. **Vol Surge** implements the full Volume Flow Indicator (VFI) algorithm: logarithmic price returns, 30-day volatility windows, volume capping at 2.5× the 130-day average, and cut-off filtering at 0.2× the daily price move. The result is a momentum-style oscillator that flashes structural volume regimes before they appear in price action. Every view includes a draggable Insights panel with regime classification, period extremes, and rolling statistics. Smart defaults per view (1Y for Density Nodes, All for Flow, 3Y for Correlation, 3Y for Volume Momentum) ensure the dashboard opens with the right lookback for each analytical task.

Signal Zones

Trading Signals by Regime

How It Is Calculated

Frequently asked questions

What is Kernel Density Estimation and why use it for volume analysis?

**Kernel Density Estimation (KDE)** is a non-parametric statistical method for estimating the probability distribution of a dataset. Applied to price history, it answers the question *'at each price level, how much of the time did the market spend trading there?'* Unlike a simple histogram, KDE produces a smooth continuous density curve rather than discrete bins, making it ideal for identifying significant price levels. The densest peaks become support/resistance levels with strong statistical backing rather than arbitrarily-chosen round numbers.

How should I interpret the Center of Gravity?

The **Center of Gravity** is the price level where the market has spent the most time over the selected period. It functions similarly to a VWAP but based on time-at-price rather than volume-weighted average. Price tends to oscillate around it (equilibrium behaviour) until a structural break. Breakouts above COG with volume are typically durable; failed breakouts where price returns below COG often precede sharp reversals. Use COG as a mean-reversion anchor in range-bound markets and as a trend-confirmation level in directional markets.

Why does the Flow Index only work for Bitcoin?

The **Flow Index** measures the acceleration/deceleration of stablecoin supply growth. This is a macro-level crypto liquidity proxy. Since stablecoin supply drives the broader crypto ecosystem (not any specific altcoin), the meaningful signal is against the liquidity's biggest correlated asset: Bitcoin. For altcoins, the Correlation view provides similar information but measured differently. It correlates each asset's YoY price performance against stablecoin supply growth, giving you a per-asset signal for whether that specific coin is tracking broader liquidity or responding to idiosyncratic factors.

What's the difference between Flow Index and Correlation?

**Flow Index** is a BTC-only *absolute* signal. It measures whether stablecoin inflows themselves are accelerating or decelerating, independent of BTC's price. **Correlation** is an asset-specific *relational* signal. It measures whether an asset's price is actively tracking stablecoin supply changes. High Flow Index + high Correlation = liquidity expansion directly driving that asset. High Flow Index + low Correlation = liquidity growing but that asset responding to idiosyncratic factors. Both views complement rather than replace each other.

What is Volume Flow Indicator (VFI) and how do I use it?

**VFI** (Volume Flow Indicator) is a momentum-style oscillator developed by Markos Katsanos that combines directional price movement, volume intensity, and volatility normalisation. The key innovations are: (1) capping extreme volume days at 2.5× the moving average (prevents one explosive day from dominating), (2) directional filtering where volume only counts if the price move exceeds a volatility-scaled threshold (filters out noise days), and (3) 130-day aggregation with 18-day smoothing (captures structural regime rather than daily churn). Values above +20 indicate sustained buying pressure regime; below -20 indicate sustained selling pressure; crossings of zero often precede medium-term trend changes.

How do I read the Volume Momentum ratio?

**Volume Momentum** is a plain ratio of recent participation to the yearly baseline: the 30-day average daily volume divided by the trailing 365-day average. A reading of **1.0×** means the last month of volume matches the annual average exactly. **Above 1.0×** means participation is heating up (1.5× means the last 30 days averaged 50% more volume than the trailing year), **below 1.0×** means it is cooling. The view sorts readings into five regimes: Fading (below 0.6×), Cooling (0.6-0.9×), Average (0.9-1.15×), Elevated (1.15-1.6×) and Surging (above 1.6×). Use it as a conviction gauge: durable trends usually carry Elevated-to-Surging momentum, whilst moves made on Fading momentum tend to lack staying power.

What's the difference between Volume Momentum and Volume Surge (VFI)?

Both read the volume regime but answer different questions. **Volume Momentum** is a directionless magnitude ratio. It asks *'is the market trading more or less than its yearly average right now?'* and rises whether the heavy volume is buying or selling. **Volume Surge (VFI)** is directional. It filters volume by whether price moved up or down beyond a volatility-scaled threshold, so positive readings mean sustained buying pressure and negative readings mean sustained selling. Read them together: rising Volume Momentum tells you participation is up, and the sign of the VFI tells you which side that participation is taking.

What bandwidth should I use for Density Nodes?

Bandwidth controls how smooth the density estimate is. **Tight** (0.01) produces many narrow peaks, which is useful for identifying precise price levels in ranging markets. **Std** (0.03) produces a balance of detail and smoothness, which is the recommended default for most analysis. **Smooth** (0.08) produces a few broad peaks - useful for identifying major regime levels in highly volatile markets (e.g., full BTC cycle analysis where short-term levels are irrelevant). As a rule of thumb, use Tight for 3-6 month analysis, Std for 1-2 year analysis, and Smooth for 3+ year structural analysis.

Why do volumes for altcoins look so different from BTC?

Altcoin volume patterns reflect their different market structures: (1) altcoin volumes typically spike during idiosyncratic events (listings, upgrades, narrative cycles) rather than following broad market volume, (2) smaller-cap altcoins can experience 10× volume spikes during 'season' rotations whilst BTC's volume is relatively stable, (3) many altcoins have very heavy derivative-to-spot volume ratios, making spot volume alone a thin signal. Always check the dominant venue and compare against BTC's baseline for context - a 3× spike in SOL volume means more or less depending on whether BTC volume is also elevated.

How reliable is the volume data?

Volume data comes from the aggregated Chart Inspect crypto price feed which consolidates spot volume across major venues. It's generally reliable for the top 25 tracked assets but with known caveats: (1) volume can be inflated by wash trading on smaller venues, (2) different data providers use different venue weightings, producing variances up to 15-20% on altcoins, (3) very recent volume data (last 24 hours) may still be settling as venues report final figures. For structural analysis, the 7-day smoothed volume series is more reliable than single-day spikes.