As market activity continues to be low, data shows that the average weekly Bitcoin trading volume is stable at the same levels as in July 2021.
The Bitcoin trading volume has remained low in recent weeks
Arcane Research’s latest weekly report shows that the volume of BTC trading has fallen to its July lows.
The “trading volume” is an indicator that measures the total amount of Bitcoin being transacted on the chain in a day.
This metric increases in value, which means that investors move more coins at the moment. This trend indicates that market activity is increasing as more holders are interested in trading.
A downtrend in this indicator could indicate that the Bitcoin market has become less active. This could be a sign that investors are not interested in crypto at this time.
Below is a chart that illustrates the change in BTC trading volume during the past 12 months:
The indicator appears to have had low value recently. Source: Arcane Research's The Weekly update - Week 15, 2022| Source: Arcane Research's The Weekly Update - Week 15, 2022
The graph above shows that the daily Bitcoin spot trading volume is down a lot in recent months and is now at $3 billion on average.
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Now, the metric has reached its lowest level since July last year. The May crash had seen the price consolidating in a sideways fashion for some time.
Bitcoin Prices Rise Above $42k; Can They Revive the Volume?
BTC prices have made significant moves in recent years, so periods with high trading volumes tend to occur. It’s because to sustain any such move, the market needs a high number of active traders.
Similar reading | Calm Before The Storm: Bitcoin Volatility Reaches Pre-Bull Breakout Levels
But it’s also true that any large price move attracts more investors to the market, thus raising the volume. In cases when it doesn’t happen, the rally generally dies down before too long.
Today, Bitcoin’s price has crossed above the $42k mark again after plunging down below the $39k level just a few days back. This chart illustrates the trend.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
It’s possible that this new surge may be able to revive the volume a little. However, it’s also true that there have been a few instances this year already where a rise in the price wasn’t accompanied by a spike in the volume. The outcome of this scenario is yet to be determined.
Unsplash.com featured image, Charts from TradingView.com and Arcane Research charts