Bitcoin Trading Volume Plummets Down From Recent Top
Data shows the Bitcoin spot trading volume has once again come back down to normal values for 2022 after the big surge recently.
Bitcoin Trading Volume Falls Back Down To Values Around $4 Billion
As per the latest weekly report from Arcane Research, the Bitcoin trading volume has plummeted back down after the recent high values.
The “daily spot trading volume” is an indicator that measures the total amount of Bitcoin moving on the chain on any given day.
When the value of this metric goes up, it means the number of coins changing hands on the network is increasing. Such a trend can be a sign that interest around the crypto among investors is rising right now.
On the other hand, a downtrend in the volume would suggest that market activity is going down. This trend may imply that the general interest around the crypto could be diminishing.
Historically, high values of the indicator have provided for a favorable environment to push large moves in the price of Bitcoin.
Related Reading | Investors May Expect Downside For Bitcoin And Ethereum Market For The Next 3 Months
The reason behind this is that to sustain any such move, a large number of active traders are needed (which high volumes correspond to).
Now, here is a chart that shows the trend in the Bitcoin trading volume (7-day average) over the past year:
Looks like the value of the metric has plunged down recently | Source: Arcane Research's The Weekly Update - Week 20, 2022
As you can see in the above graph, the Bitcoin trading volume had sharply jumped up to high values just below $10 billion recently.
These were highs not observed since May of last year. However, the indicator’s value has already plummeted down, clocking just about $4 billion now.
This value is more in line with the normal for the year 2022 so far, but is still a low value historically, as has been the case during the rest of the year.
Related Reading | Bitcoin, Ethereum Exchange Inflows Suggest Sell-Offs Are Far From Over
The report notes that this sharp turn in the trading volume shows how fast the market activity can swing for Bitcoin.
Generally, during periods of low activity, the price of the crypto has tended to run sideways. So, considering the current values, a similar outcome may follow for the coin now as well.
At the time of writing, Bitcoin’s price floats around $29.5k, down 1% in the past week. Over the last month, the crypto has lost 25% in value.
The below chart shows the trend in the price of the coin over the last five days.
It seems like the price of BTC has continued to move sideways over the last few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research