Data shows the Bitcoin trading volume has continued to remain at low levels this week, weakening the latest rally in the crypto’s price.
The Bitcoin Spot Trading Volume has Stabilized at Low Values Recently
The latest Weekly Report from Arcane Research shows that the BTC Spot Volume has remained stable at relatively low levels.
The “daily trading volume” is an on-chain indicator that measures the total amount of Bitcoin being transacted on the network on any given day.
If this metric rises, that means more coins are being moved on the blockchain at the moment. As investors get more interest in crypto, this shows how the network has become more active.
A decrease in Bitcoin volume could indicate that market activity has slowed down. This could indicate that there is little interest in the cryptocurrency at the moment. Investors may wait for the price of Bitcoin to rise before making a move.
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Below is a chart which shows how the volume of BTC trades has changed over the past 12 months.
The indicator's value seems to have been shifting sideways in recent weeks. Source: Arcane Research Weekly Update Week 13, 2022| Source: Arcane Research's The Weekly Update - Week 13, 2022
You can see that Bitcoin’s trading volume has stabilised since some time. And this week, it appears to have maintained that trend.
While this has meant the volumes haven’t dropped further recently, their value has nonetheless been quite low in the past weeks.
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A large number of traders is required to make a price movement large enough to last. The recent Bitcoin rally lost momentum recently due to low volume.
BTC price
At the time of writing, Bitcoin’s price floats around $44.8k, down 5% in the last seven days. The crypto’s value has risen 13% over the last month.
Below chart displays the trends in the value of the coin during the last five working days.
BTC seems to be in a downward trend over the last twenty-four hour | Source: BTCUSD on TradingView
Bitcoin’s price has fallen below $45k today after a couple of days of sideways movement.
Currently, it’s unclear when upwards momentum may return to the crypto. One thing is certain, however: any rallies must be supported by rising trading volumes. Otherwise the rally will soon lose its firepower.
Unsplash.com's featured image. Charts by TradingView.com. Arcane Research: