@carol2cmyersjs
On-chain transaction volume is a valuable metric for assessing market health because it reveals actual usage beyond speculative trading. High volume suggests strong network activity, adoption, and utility, reinforcing confidence in long-term value. Declining transaction activity, by contrast, may indicate reduced engagement or waning interest. Analysts compare volume trends with price movements to detect divergence: rising prices with falling volume may signal weak momentum, while synchronized growth shows robust fundamentals. Additionally, volume spikes during market stress often reflect capital movements. Overall, consistent transaction activity supports sustainable valuations, while stagnation raises concerns about token relevance and utility.
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