The Bitcoin trading volume indicates how many Bitcoins are being bought and sold on specific exchanges. High trading volumes are likely to drive more on-chain activity, for example when people deposit and withdraw funds. It is also a good indicator of the general interest in the crypto market.
The displayed volume is only from a small proportion of exchanges. The actual total trading volume is much higher. Part of the trading volume is also made outside crypto exchanges, for example in the OTC (Over The Counter) market.
The trading volume is the sum of the trading volume of the BTC/USD pair from some exchanges.