What is the difference between MAVOL and a simple volume moving average?

Understanding Volume in Cryptocurrency Trading

In cryptocurrency trading, volume represents the total number of assets traded over a specific period. It is a crucial metric because it reflects market activity and the strength behind price movements. High volume often indicates strong interest and can validate price trends, while low volume may suggest uncertainty or lack of conviction. Traders analyze volume to confirm breakouts, spot reversals, or detect accumulation and distribution phases. Two tools used to interpret volume are the Moving Average of Volume (MAVOL) and the simple volume moving average. Although these terms may seem identical, they serve distinct purposes depending on the context and calculation method.

What Is a Simple Volume Moving Average?

A simple volume moving average is calculated by taking the arithmetic mean of trading volume over a defined number of past periods. For instance, a 20-period simple volume moving average adds up the volume from the last 20 candles and divides the sum by 20. This provides a smoothed line that helps traders identify baseline volume levels.

• Collect the volume data from the last n periods (e.g., 20 daily candles)
• Add all volume values together
• Divide the total by n (20 in this case)
• Plot the resulting value on the chart
• Repeat this process for each new period, dropping the oldest volume value and including the newest

This average is typically displayed beneath the price chart and acts as a reference for determining whether current volume is above or below normal. When volume spikes above this line, it suggests heightened interest. The simplicity of this method makes it widely accessible and commonly used across trading platforms.

Defining MAVOL: Beyond the Basics

MAVOL, or Moving Average of Volume, is technically synonymous with the simple volume moving average in many contexts. However, in certain trading software or analytical frameworks, MAVOL may refer to a specific implementation or a default setting within a platform’s volume analysis toolkit. For example, on platforms like TradingView or MetaTrader, typing 'MAVOL' into the indicator search may automatically apply a 20-period simple moving average to volume data.

Despite the naming similarity, the key point is that MAVOL does not imply a different calculation method unless explicitly modified. It usually defaults to a simple moving average unless the user configures it otherwise. Some traders may mistakenly believe MAVOL is a proprietary or advanced version of volume averaging, but in reality, it's often just a labeled version of the standard SMA applied to volume.

Alternative Moving Averages Applied to Volume

While the simple moving average is the default, traders can apply other types of moving averages to volume data, which may lead to confusion when comparing them to MAVOL. These include:

• Exponential Moving Average (EMA) of Volume: Gives more weight to recent volume data, making it more responsive to sudden changes
• Weighted Moving Average (WMA) of Volume: Assigns linearly decreasing weights to older data points
• Smoothed Moving Average (SMMA) of Volume: Reduces noise by incorporating all available data with decreasing significance over time

If a trader applies an EMA to volume instead of a simple average, the resulting line will react faster to volume spikes than a standard MAVOL. This distinction becomes important during volatile cryptocurrency market conditions, where timely interpretation of volume surges can influence trade decisions. However, unless specified, MAVOL refers only to the simple version.

Visual and Functional Differences in Charting Platforms

On most charting tools, the volume moving average appears as a single line overlay on the volume histogram. The default period is often 20, but this can be adjusted. When using the term MAVOL, traders should verify the exact settings in their platform:

• Check whether the indicator uses SMA, EMA, or another type
• Confirm the lookback period (e.g., 10, 20, or 50 candles)
• Observe how the line reacts to sudden volume changes compared to raw volume bars

For example, on a Bitcoin/USDT 4-hour chart, a sudden surge in volume due to a macroeconomic announcement may cause the volume bar to shoot above the MAVOL line. If the MAVOL is based on a simple average, the line will adjust gradually. If it were an EMA, the adjustment would be sharper. This responsiveness affects how traders interpret volume confirmation for breakouts or reversals.

Practical Application in Cryptocurrency Analysis

Traders use volume moving averages, including MAVOL, to filter out noise and identify meaningful volume shifts. Consider the following scenario on a Binance BTC/USDT chart:

• Price approaches a resistance level
• Volume begins to rise, exceeding the MAVOL line
• The breakout candle closes above resistance with volume 1.5 times the MAVOL

This suggests strong buying pressure and increases confidence in the breakout's validity. Conversely, if price breaks resistance but volume remains below MAVOL, the move may lack support and could fail. Similarly, during a downtrend, a drop in volume below the moving average during a pullback may indicate weak selling momentum, potentially signaling a reversal.

Using MAVOL in this manner allows traders to avoid overreacting to isolated high-volume candles and instead focus on sustained volume trends.

Customization and Indicator Settings

To ensure accurate analysis, traders must understand how to configure volume moving averages correctly:

• Open the indicator settings on your charting platform
• Locate the volume moving average or MAVOL option
• Choose the moving average type (SMA recommended for standard MAVOL)
• Set the period length based on trading strategy (e.g., 14 for short-term, 50 for long-term)
• Adjust color and thickness for visual clarity
• Apply the indicator and observe its behavior across different market conditions

Misconfiguring the moving average type can lead to incorrect interpretations. For instance, using a 10-period EMA instead of a 20-period SMA will produce a more sensitive line, potentially generating false signals during choppy cryptocurrency markets.

Frequently Asked Questions

Can MAVOL be used on all cryptocurrency timeframes?Yes, MAVOL can be applied to any timeframe, from 1-minute scalping charts to weekly swing trading views. The interpretation remains consistent: it shows average volume over the selected period. Shorter timeframes may require smaller lookback periods (e.g., 10), while longer timeframes benefit from larger periods (e.g., 50) to capture meaningful trends.

Is MAVOL the same across all trading platforms?Not necessarily. While the underlying concept is identical, the default settings for MAVOL may vary. On some platforms, it may default to a 14-period SMA, while others use 20. Always check the indicator’s properties to confirm the period and moving average type being used.

Can I combine MAVOL with other volume-based indicators?Absolutely. Traders often pair MAVOL with tools like Volume Profile, On-Balance Volume (OBV), or Volume Oscillators. For example, observing a spike above MAVOL alongside a rising OBV can strengthen the case for a bullish trend continuation in Ethereum or Solana.

Does MAVOL work effectively during low-liquidity altcoin trading?It can, but with caution. Low-liquidity altcoins often exhibit erratic volume patterns. A single large trade can distort the volume bar, causing it to spike far above MAVOL. In such cases, increasing the moving average period or using a smoothed version may help reduce false signals.