You can literally just buy coins that continually have a higher volume than their market cap and take profit when they become similar... Yeah, sounds crazy. But hear me out.
Here is the reasoning for why this would work *in theory* ->
The price is determined by supply and demand, right? Well, the volume is the demand, and the market cap is the supply, more or less. We see signs that the demand is higher than the supply in a big way when the volume consistently outstrips the market cap. Because of this volume, you know that the fiat sitting ready to buy this token as it rises is sufficient and the lacking side is the supply of the token itself. You can also see the inverse of this with assets like AXS that are only able to trade 5-10% of their market cap in volume because of the lack of demand for the asset and surplus of supply. This causes tokens like AXS to fall in price and build a strong downtrend and tokens like FITFI to rise and build a strong uptrend.
Here is the reasoning for why this would work *in theory* ->
The price is determined by supply and demand, right? Well, the volume is the demand, and the market cap is the supply, more or less. We see signs that the demand is higher than the supply in a big way when the volume consistently outstrips the market cap. Because of this volume, you know that the fiat sitting ready to buy this token as it rises is sufficient and the lacking side is the supply of the token itself. You can also see the inverse of this with assets like AXS that are only able to trade 5-10% of their market cap in volume because of the lack of demand for the asset and surplus of supply. This causes tokens like AXS to fall in price and build a strong downtrend and tokens like FITFI to rise and build a strong uptrend.
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It is also possible that some or all of the volume is "fake" and actually generated through wash trading. This should be taken into consideration, and the validity of all volume sources should be assessed.
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We can also view this market from a price action lens and it looks nice
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Even with this thought I am closing half my position to lock in profits. There isn't much reason not to take some home.
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I decided to close the rest of my position. Good game!
It's worth noting that there are exceptions to this theory of volume and market cap, such as when you get a very insane shakeout in a strong trend where volume only spikes for a moment. These do not always hint at any future movement. Look for assets that consistently have more volume than market cap over several days, preferrably.