I used to believe that 24h volume is the most trustworthy number on a coin ranking chart—if it's higher, liquidity is better, it's easier to place trades, and it's harder to manipulate. I was wrong.
Volume only counts matched orders; it can’t tell whether two real people are trading with each other, or whether an account matches orders with itself to inflate the figures.
Supporting data for this argument.
First, independent studies over many consecutive years, from a Bitwise report to the SEC in 2019 to a Forbes analysis in 2022, have all pointed out that most exchanges showing very high reported trading volumes are largely unregulated. Some platforms differ by more than 90% compared with the actual volume, measured via order-book depth and on-chain data.
“Newly listed” or “just launched on a small exchange” coins often see volume spike dramatically in the first few days, then drop off sharply right after. This is the classic model of pumping volume to climb the rankings before pulling out liquidity.
Even large exchanges have previously attached warning labels and delisted certain trading pairs after detecting abnormal order-matching behavior. So this isn’t uncommon—it just happens more often on small, anonymous exchanges.
The scenario that makes this argument wrong is if an exchange publishes audited, independently verified volume; if it matches the order-book depth data and real on-chain settlement. Then the volume there is trustworthy with near certainty. In that case, high volume really does come with real liquidity, and there’s no need for extra doubt.
My personal filtering method is not complicated. Look at the spread between the bid and ask prices—real volume goes together with a tight spread and a deep order book across multiple price levels.
Fake volume often comes with an unusually wide spread compared to the reported size, or prices jumping in steps even though the displayed volume is in the tens of millions of dollars. Another sign: volume spikes sharply while the price stays flat for many hours—the classic case of self-matching.
What to watch: each time a coin shows up in the top volume list unusually within the next 24 to 48 hours without any news or listing event that explains it, keep watching for another 3 to 5 days. Fake volume typically drops back toward near 0 as quickly as it appeared.
Questions for everyone to answer themselves before believing any volume ranking table: if this number drops by 80% tomorrow, would you still find this coin worth noticing? If the answer is no, then from the beginning the volume was never a reason worth caring about.
Personal observation, not investment advice.