Low-volume drift
What does it mean when a price drifts somewhere on thin trading, and how can you tell?
In plain words
A low-volume drift is a price move that happens while few contracts or coins change hands. Thin trading means few orders are sitting in the book, so a small order can push the price a long way without anyone really agreeing to the new level.
Why it matters
Moves made on thin trading are easier to reverse, because the level was never tested by much real money. Traders compare a move's volume against a baseline to judge whether it reflects broad agreement or just an absence of opposing orders.
In a real week: ETH, week of 19 November 2018
In the week of 19 November 2018, ETH fell 33.72% within a 74.19% range, while dollar turnover was 0.59 billion, or 1.26 times its prior 12-week average. Measured against that baseline, trading was not unusually thin, so the decline rested on turnover above normal rather than a price drifting through an empty book. The close sat at 20.6% of the week's range, near the low.
A common mistake
Assuming any large move is thin. Volume must be compared with a baseline, since a big fall on heavy turnover is a different signal from a drift on quiet turnover.