How to Calculate Relative Volume and Time-Based Relative Volume

Understanding market activity is crucial for traders seeking an edge in financial markets, especially in fast-moving environments like cryptocurrency trading. Two powerful metrics—relative volume and time-based relative volume—help traders identify unusual activity, assess momentum, and spot potential breakouts or reversals. In this guide, we’ll break down how to calculate both metrics, explain their significance, and show how they can be applied using scripting logic compatible with popular charting platforms.

What Is Relative Volume?

Relative volume (RelVol) measures current trading volume in relation to the average volume over a defined historical period. It provides context by answering a simple question: Is today’s (or this period’s) volume higher or lower than usual?

The formula is straightforward:

Relative Volume = Current Volume / Average Volume

By default, many systems—including the one described here—use a 10-period simple moving average (SMA) of volume to compute the baseline average. Importantly, the current period’s volume is excluded from the average calculation to avoid bias.

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How to Calculate Relative Volume: Step-by-Step

1. Collect Volume Data: Gather the volume values from the last 10 completed periods (e.g., 10 candles on a 5-minute chart).
2. Compute the SMA: Calculate the average of those 10 volume readings.
3. Divide Current Volume: Divide the current period's volume by the 10-period SMA (from the previous bar).
4. Plot the Result: Visualize the output on your chart as a normalized line or histogram.

This logic can be implemented in Pine Script (used on TradingView) as follows:

//@version=5
indicator("RelVol")
AvgVol = ta.sma(volume, 10)
plot(volume / AvgVol[1], title="Relative Volume")

A relative volume value above 1.0 indicates above-average activity; values below 1.0 suggest quieter-than-usual conditions.

Adjusting for Cross-Exchange Comparisons: USD-Weighted Relative Volume

When analyzing multiple cryptocurrency pairs across centralized exchanges (CEX), it's essential to standardize volume into a common unit—typically USD—to ensure fair comparisons.

Why? Because raw volume numbers differ based on whether they’re reported in base currency (e.g., BTC), quote currency (e.g., USDT), or another denomination.

USD-Based Relative Volume Formula

To normalize:

Volume in USD = Volume × Closing Price × Currency Conversion Rate

Once converted, apply the same 10-period SMA logic.

Here’s an advanced Pine Script example that handles different volume types and converts them into USD:

//@version=5
indicator("RelVolForCEX")
volExpr = syminfo.volumetype == "quote" ? volume : 
   (syminfo.volumetype == "base" ? close * volume : na)
volInUSD = volExpr * request.currency_rate(syminfo.currency, "USD", ignore_invalid_currency = true)
avgVol10d = ta.sma(volInUSD, 10)
plot(volInUSD / avgVol10d[1], title="relative_volume_10d_calc_usd")

This script:

• Detects if volume is quoted in base or quote currency.
• Converts all values to USD using real-time exchange rates.
• Computes the 10-day average and plots relative volume accordingly.

This approach enables apples-to-apples comparisons across diverse trading pairs like BTC/USDT, ETH/BTC, or SOL/USD.

Understanding Time-Based Relative Volume

While standard relative volume looks at recent activity regardless of time of day, time-based relative volume (Time RelVol) adds a temporal filter: it compares current volume not just to any past 10 periods, but specifically to the same time of day over the past 10 days.

This is particularly useful in markets with strong intraday patterns—such as equities or crypto pairs influenced by U.S. market hours.

Example: Calculating Time-Based Relative Volume

Let’s say you’re analyzing a 5-minute chart and want to know if volume at 10:30 AM UTC is unusually high today compared to previous days.

Instead of averaging the last 10 candles, you collect only the 10:30 AM UTC candle from each of the past 10 trading days.

👉 See how time-specific volume spikes can signal breakout opportunities before they happen.

First, compute the average:

Sum = ~9.61 million
Average = ~961K

Now, if today’s 10:30 AM candle shows volume of 2.5 million, then:

Time Relative Volume = 2.5M / 961K ≈ 2.6

This means volume at this exact time is more than double the average—a strong signal of increased interest or potential news impact.

Like standard RelVol, CEX filters often convert these volumes into USD first for consistency across assets.

Why These Metrics Matter for Traders

Both forms of relative volume help traders detect anomalies:

• Relative Volume > 2: Often signals breaking news, institutional activity, or technical breakout setups.
• Time-Based RelVol Spikes: Can highlight recurring high-volatility windows (e.g., post-bell earnings reactions or macroeconomic data releases).

These insights are invaluable for:

• Timing entries and exits
• Confirming breakout validity
• Avoiding false moves during low-volume traps

Frequently Asked Questions (FAQ)

What does a relative volume of 3 mean?

A relative volume of 3 means current trading volume is three times higher than the average over the past 10 periods. This often indicates strong market interest and may precede significant price movement.

Can relative volume predict price direction?

Not directly. High relative volume shows increased activity but doesn’t indicate direction. However, when combined with price action (e.g., breakout on high volume), it increases confidence in trend continuation.

Why use time-based relative volume instead of regular relative volume?

Time-based RelVol accounts for intraday seasonality—for example, higher volumes during U.S. open vs. Asian session. This makes it better suited for identifying truly abnormal activity rather than normal daily peaks.

Is relative volume available on all exchanges?

Most major platforms—including OKX—offer some form of volume analytics. Advanced tools like time-based relative volume may require custom scripts or premium scanners.

How often should I recalculate relative volume?

It updates in real-time with each new candle close. On a 5-minute chart, it recalculates every five minutes using the latest completed period.

Does relative volume work for cryptocurrencies?

Absolutely. Crypto markets operate 24/7, so identifying sudden surges in activity—especially during typically quiet hours—can reveal early signs of manipulation, whale movement, or breaking news.

Final Thoughts

Relative volume and its time-sensitive counterpart are more than just indicators—they're diagnostic tools that reveal the intensity behind price movements.

Whether you're scanning for breakout candidates or validating a trade setup, integrating these metrics into your analysis adds depth and precision.

👉 Start applying real-time volume analysis with advanced tools on a trusted platform.