Does number of traders affect volatility?

[Stablexcoin]

Active investors and traders are responsible for volatility. When there are consistent orders either the buy orders or the sell orders in the market we tend to see the price changes in real time. This also occurs most times when most of the buyers don't agree with the seller on the selling price. Most people tend to misunderstand the part that they feel news affects the volatility more. No, it doesn't. News triggers traders who tend to follow the news for their day-to-day trading activities. This favors them sometimes and most time they end up losing.

Common sense is the most important thing in most trading. Because you often have to decide very quickly that you will take the next decision and based on that your profit and loss will be determined. But it seems to me that the images you have shown as examples are not followed by most traders, because most of them try to present their arguments with contemporary thinking. So it seems to me that contemporary thought plays the most active role.

Let me put it this way, you have to be a critical thinker to be successful in trading. When you are too slow to know what and when to execute will make traders lose so many opportunities. Also, being too quick to take action without considering other options would hinder success in trading. A trader needs to be fast in thinking and have patience to evaluate the different options that comes in his mind. Although it doesn't mean he has to take all day or all night before entering the market.

[Faisal2202]

The number of traders is increasing more than before as more people are generally becoming more interested in ways to become more financially independent and as thus in search of skills like trading.
Does the number of traders directly affect the volatility of the market? If it does, can we assume that trading was easier before with less traders (less volatility) than now when there are more traders, and the market more volatile?

Yes, when there will be more traders, then there will be more money in the market. which means more traders won't have the same sentiments (if they have then that's a good thing) but if they don't like some have bullish and some have bearish sentiments then predicting the market becomes a little difficult. But if the greed index is overall showing a greed score high then that's mean overall market's users are bullish and trading won't be that difficult in that timezone.

Just like it is now, if you see the greed index at high score on CMC, market is bullish, but if the sentiments of some of the users changes and if those users have high volumes then market's volatility will also changes. In my opinion, if more traders are joining but they have less money then that's not matter at all. All that matters to market's volatility is high volume of money flowing in and out. I hope you got my point.

[poodle63]

honestly volatility is such an unpredictable thing there are many factor to determine whether something can affect volatility but having higher number of trader doesn't necessarily means the market gonna be a lot more volatile, if you can see, a coin that gets listed newly on reputable exchange with abundant trading volume gonna fluctuates so hard in the first hour because many people are enthusiastic about the trades, that motivated some of them to speculate hard thats why the price difference sometime really far within certain intervals.
meanwhile if you observe a market with higher trading volume that have been listed in the exchange from long time ago with number of trader that's definitely high enough like bitcoin and ethereum for example regardless of the trading pair here, the volatity isn't much despite there are i guess equal number of trader if not more compared to new coin getting listed.
it depends on the circumstance of the coin itself if its new coin people speculate that in itself causes volatility.
if the market is already old enough, people just follow the current of the river.

[johnsaributua]

The more the price of crypto curencies including a very significant one is bitcoin, I think it has an interesting story / momentum when density and some people trade and save it. so that the confidence of traders in crypto tends to increase until now, we agree that decentralization has the freedom to even sell retail.BLockchain records all transactions and is amazing.

For me, when the queue is quiet, it is indeed smoother, but the density of transactions also brings validation up, fees increase and volume also increases until there is a pump. that's what we hope for with the increase in the price of the coins we save, it's better.

From this trust, small talks arise to people who are new to crypto, every day there may be people who buy it once, because I often encounter social media or digital platforms, one of which shows the benefits and mechanisms of cryptocurrencies.

Indeed, each coin is different in volatility, because the interest of personal interest in coins that have been listed on exchanges varies. when faced with a high volatility front gets a higher profit or a good price volatility is not too wild but very impressive, like dividing 50% is quite interesting for the conditions of the two markets.

 

[Bushdark]

The number of traders is increasing more than before as more people are generally becoming more interested in ways to become more financially independent and as thus in search of skills like trading.
Does the number of traders directly affect the volatility of the market? If it does, can we assume that trading was easier before with less traders (less volatility) than now when there are more traders, and the market more volatile?

What is more important in trading is the amounts that are used in trading. It is not actually about the numbers of traders but the capital that is involved. Just imagine 10000 people trading in the market with huge capital and at least an individual trader is trading with 100,000k , this is enought to create volatility in the market. But when the numbers are huge like 1,000,000 traders using just $100 to trade, this is not going to make a great impact and the market is not going to be as volatile compared to the former.

[batang_bitcoin]

Does the number of traders directly affect the volatility of the market?

Yes as it increases the demand.

If it does, can we assume that trading was easier before with less traders (less volatility) than now when there are more traders, and the market more volatile?

Pretty much because the demand wasn't that much before. But we can also think of having few traders in the market but most of them are likely the whales. They bring so much demand that even they're less, they also contribute to much volatility.

[husencoe]

Does the number of traders directly affect the volatility of the market?

I think the number of traders just has a little influence on market volatility, because it is possible that with a large number of traders there is an opportunity for more transactions to occur. And more transactions will increase demand and this can cause volatility.

However, of course it will not be affected if the number of traders do not carry out transactions. Silent traders cannot increase volatility, but whales that move even with small numbers will have more of an effect on the market. Because cryptocurrency volatility is inversely proportional to capitalization. This means that the higher the capitalization of a coin, the lower its volatility.

[God bless u]

Traders are increasing day by day and people are in search of some good income strategies. Trading has become more popular in the previous couple of years.It surely will affect the volatility of the crypto market as more investors the different will be the interest of investing and the more volatile a project will become..

That's not a negative thing we just need to get enough  skills to make an investment.volatile market conditions can also give you some very good profits if you can predict the market trend by the skills you gained. So it has a negative effect also but there is a positive one too.

[SquirrelJulietGarden]

Traders are increasing day by day and people are in search of some good income strategies. Trading has become more popular in the previous couple of years.It surely will affect the volatility of the crypto market as more investors the different will be the interest of investing and the more volatile a project will become..

You talked about it inaccurately.

With bigger trading volume, volatility will become smaller. You can see Bitcoin ROIs with different past three cycles and see how its ROIs changed from very high to lower and lower cycle by cycle.

Marketcap and trading volume are two biggest factors that affect on price volatility.

Bitcoin & Traditional Assets ROI (vs USD)
ROI chart
Bitcoin price history

[Silberman]

The number of traders is increasing more than before as more people are generally becoming more interested in ways to become more financially independent and as thus in search of skills like trading.
Does the number of traders directly affect the volatility of the market? If it does, can we assume that trading was easier before with less traders (less volatility) than now when there are more traders, and the market more volatile?

What matters is the money pursuing a particular asset, so even if the number of traders went up but the average capital held by each one of those traders went down then the volatility will go down, and when it comes to the difficulty I would think that now it is way more challenging to make money with trading than in the past, as now professional traders are dedicating their time to trade the market of cryptocurrencies, which in return is increasing the average skill level of the traders on the market, and anyone that is below that baseline has no hope of making money this way.

[moneystery]

it depends. if the market cap of the asset is very large, no matter how many people trade the asset, the price will be quite stable, for example like forex trading, you see how many people trade usd, but that doesn't make the usd value unstable.

but if the marketcap of the asset is not so big and more people trade it, maybe the price will be very unstable, because there will probably be more people manipulating the price and making the price of the asset very unstable.

[$weetne$$]

The number of traders is increasing more than before as more people are generally becoming more interested in ways to become more financially independent and as thus in search of skills like trading.
Does the number of traders directly affect the volatility of the market? If it does, can we assume that trading was easier before with less traders (less volatility) than now when there are more traders, and the market more volatile?

Yes number of traders will affect the volatility of the market but as a well equipped trader, you should be able to make perfect not minding the volatility of the market. The number of traders getting involved in cryptocurrency trading shouldn't be your concern as it is always going to increase because adoption is increasing and more people will want to make money without holding for very long and they can do that through trading. The more traders we'll have and the more money and maturity that gets into the market is the less volatile the market will become therefore the cryptocurrency market will stop being very volatile and entertaining as it's and by then institutional traders would had become a permanent part of the market. There'll still be some volatility but it won't as unpredictable as it's presently.

[dothebeats]

Of course it does, only if the said traders hold a significant amount each. If they are just your regular retail traders then I think they will all need to be geniuses in order to make some nice moves in the market and get that volatility going.

Also, it's worth noting that if these small fishes don't act collectively, they can't trade against the market and their volume will just be eaten by the huge traders in the scene. So all in all, their net impact in the market is 0 and have effectively added no volatility to the market at all.

Fluctuations happen due to different players affecting other people's decisions by moving the market to their own bidding. Essentially, more number of traders won't add that much in volatility unless they know what they're doing.

[Natalim]

it depends. if the market cap of the asset is very large, no matter how many people trade the asset, the price will be quite stable, for example like forex trading, you see how many people trade usd, but that doesn't make the usd value unstable.

USD is a stablecoin, the price is fixed no matter what happens in the market. You can't compare it with other coins like ETH, BNB, and Solana.

but if the marketcap of the asset is not so big and more people trade it, maybe the price will be very unstable, because there will probably be more people manipulating the price and making the price of the asset very unstable.

Generally, the number of traders is a huge contributing factor in regard to the volatility of the market. Whether it has a huge market cap still, we can see the impact of it. Traders prefer to use highly volatile coins because this would be a great chance to earn more rather than using low volatile projects. As the number of active traders keeps on increasing, the more we expect high volatility in the market which is actually good as it means that the crypto market is active.

[Wexnident]

~

I'd consider it as one factor since there are probably a lot of factors involved with how volatility changes such as liquidity. Suppose you were to rank which factor is involved the most. In that case, it'd be pretty hard to describe since even if a number of traders were to enter the market, without a significant amount of holding of that specific coin they aren't really going to make any waves. It'd be different for huge traders in the scene though.

And I believe trading would always be difficult regardless of the number of traders.

[KupaCrypto]

The number of traders is increasing more than before as more people are generally becoming more interested in ways to become more financially independent and as thus in search of skills like trading.
Does the number of traders directly affect the volatility of the market? If it does, can we assume that trading was easier before with less traders (less volatility) than now when there are more traders, and the market more volatile?

Number of traders does not have a direct impact or effect on the volatility of the market
Lower liquidity usually results in a more volatile market and cause prices to change suddenly, higher liquidity usually creates a less volatile market in which change in prices won't really affect the direction of the market

[GreatArkansas]

The number of traders is increasing more than before as more people are generally becoming more interested in ways to become more financially independent and as thus in search of skills like trading.
Does the number of traders directly affect the volatility of the market? If it does, can we assume that trading was easier before with less traders (less volatility) than now when there are more traders, and the market more volatile?

For me yes, I also experienced it in social media, where I have some friends in social media where they keep posting about their trades or profits during the bull market. But when the bear market comes, I don't see them anymore. Because for sure, most of their trades are only long trades and active only during a bull market.

Overall, more traders may improved liquidity and lower volatility, but this affect is dependent on a number of factors, including trading behaviour, market sentiment, and technology use.

[Sebas.tian]

Traders are increasing day by day and people are in search of some good income strategies. Trading has become more popular in the previous couple of years.It surely will affect the volatility of the crypto market as more investors the different will be the interest of investing and the more volatile a project will become..

That's not a negative thing we just need to get enough  skills to make an investment.volatile market conditions can also give you some very good profits if you can predict the market trend by the skills you gained. So it has a negative effect also but there is a positive one too.

If you look at the numbers of traders that newly join crypto trading today you will discover that the numbers of traders has increased again, because the moment people got convinced that crypto trading is the best trade someone can get involve to grow wealth, and they will like to be part of the train. You can see how it affected the volatile in this season for the market price to broke into ATH to caused massive increase that is making traders to trade their coins freely without the fear of loss in the market. But many traders always embrace the positive side to get the prediction right by trading their coins during the bullish season which is the favourable season many traders used to increase their income and to increase the numbers of new traders in the market.

[shinratensei_]

The number of traders is increasing more than before as more people are generally becoming more interested in ways to become more financially independent and as thus in search of skills like trading.
Does the number of traders directly affect the volatility of the market? If it does, can we assume that trading was easier before with less traders (less volatility) than now when there are more traders, and the market more volatile?

Number of traders does not have a direct impact or effect on the volatility of the market
Lower liquidity usually results in a more volatile market and cause prices to change suddenly, higher liquidity usually creates a less volatile market in which change in prices won't really affect the direction of the market

indeed even that with a big if, if the coin is matured enough in the exchange with abundant liquidity, and if the coin itself doesn't have any meaningful events going.
basically when something shady gets pulled off by foundation behind the coin itself or when a good news coming out price won't be volatile.

but i've seen many times a coin that has just recently deployed and traded on the market are having so massive volatility that the price always changing tides every minutes.
but overall if a coin already having established place in an exchange for a long time maybe weeks it can easily gains stability, even though liquidity isn't sufficient.
determining relation with price stability, there are many factors that i think could affect it.

[Kelward]

Does the number of traders directly affect the volatility of the market? If it does, can we assume that trading was easier before with less traders (less volatility) than now when there are more traders, and the market more volatile?

People trade bitcoin than shit coins but why bitcoin is less volatile than shit coins? More people trade gold but gold is less volatile than bitcoin? More traders does not mean but the marketcap is what that is very important. The lower the marketcap of a coin, the higher the volatility. Not about the higher the number of traders.

Your analysis is very self explanatory, it's not really the number of traders that drives volatility in the market, but the market cap of a coin, meaning that if it's high the chances of volatility becomes low, and if the market cap of a coin is low, it's chances of volatility will be higher, so the volatility and market cap of a coin works in opposition. Although I still think that the influx of more crypto traders will have some effects on price volatility, as they increase the market will become more volatile, but it's not to undermine the fact that is earlier mentioned about marketcap being the main driver.