Excluded Volume is a term in cryptocurrency that refers to the space that is not available for trades on an exchange. This area is typically reserved for large orders or trades that could potentially influence the market significantly, causing price movements that are not reflective of the overall market sentiment.
When someone places a large order or trade on an exchange, the exchange may temporarily remove that volume from the available pool of assets for other traders to buy or sell. This is done to prevent sudden price fluctuations or market manipulation by one or a few traders with significant resources.
Excluded Volume helps to maintain stability and fairness in the crypto market by ensuring that traders with large volumes cannot easily manipulate prices to their advantage. By temporarily removing these large orders from the market, the exchange can prevent sudden and drastic movements in the price of a particular asset, allowing for a more orderly and efficient trading environment for all participants.
