Bitcoin Trading Volume Drops From Recent Top
Data shows that Bitcoin spot trading volume has fallen back to 2022 normal values after its major surge in recent times.
Bitcoin Trading Volume Drops Back To Values Around $4 Billion
According to the latest weekly report from mysterious investigationBitcoin trading volume has fallen again after recent highs.
The “daily spot trading volume” is an indicator that measures the total amount of Bitcoin moving in the chain on a given day.
When the value of this stat increases, it means that the number of coins that change hands on the network increases. Such a trend could be a sign that interest around crypto among investors is currently increasing.
On the other hand, a downward trend in volume would indicate that market activity is declining. This trend could mean that general interest around the crypto could decline.
Historically, high readings of the indicator have provided a favorable environment to drive large moves in Bitcoin’s price.
Related literature | Investors can expect a downward trend for the Bitcoin and Ethereum market over the next 3 months
The reason behind this is that to support such a move, a large number of active traders is needed (which corresponds to high volumes).
Here is a chart showing the trend in Bitcoin trading volume (7-day average) over the past year:
It seems that the value of the stat has fallen recently | Source: Arcane Research’s Weekly Update – Week 20, 2022
As you can see in the chart above, Bitcoin trading volume had recently surged to highs just below $10 billion.
These were highlights not seen since May last year. However, the indicator’s value has already fallen and now stands at around $4 billion.
This value so far is more in line with the normal value for the year 2022, but is still historically a low value, as was the case for the rest of the year.
Related literature | Bitcoin, Ethereum Exchange Influx Suggests Sell Out Is Far From Over
The report notes that this sharp turn in trading volume shows how quickly market activity can fluctuate for Bitcoin.
In general, the price of the crypto tends to move sideways during periods of low activity. So, given current values, a similar outcome for the currency may now follow as well.
At the time of writing, Bitcoin price is hovering around $29.5k, down 1% over the past week. In the past month, the crypto has lost 25% in value.
The chart below shows the trend in the price of the coin over the past five days.
It seems that the price of BTC has continued to move sideways for the past few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research