Quant Explains How US Stock Market Volumes Influence Bitcoin Price

An quant explained that there was a correlation between Bitcoin’s price and recent US stock exchange volumes.

TradFi Depth oscillator has fallen to a low point and is now rising again

An analyst explained in a CryptoQuant article that the volume depth of traditional financial markets is low in recent years.

The “TradFi volume” is a measure of the total amount of transactions that buyers and sellers are making on the US stock market.

There is a concept called “market depth,” which is the ability of any market to take in large orders without impacting the price of the commodity much.

The general rule is that the deeper the asset, the greater the number of orders in the market. However, something important is that these orders should be spread evenly within the market, otherwise the depth wouldn’t be as great.

An oscillator can help you see the cyclical trends in any asset’s depth. This chart shows the changes in the US stock exchange volume depth oscillator values over the past few months.


 Source: CryptoQuant| Source: CryptoQuant

You can clearly see that quant has identified the areas of trend in this graph between Bitcoin prices and TradFi volume level oscillator.

The crypto’s value has seen bearish winds whenever the indicator moves from negative to positive values.

However, the bullish trend has been observed in Bitcoin’s price due to the metric crossing over the zero line.

Bitcoin also saw local bottom formations at the locations where the stock-market volume depth oscillator has reached lows.

A week ago the indicator reached very low levels that were similar to February 2020 and March 2020. The indicator started to rise again since that time.

Analysts believe that Bitcoin might see an upward trend soon. They could bounce back to levels around $21.5k and $24.5k.

Bitcoin price

At the time of writing, Bitcoin’s price floats around $19.2k, up 2% in the last seven days. In the last month, crypto lost 4%.

The chart below shows how the currency’s price has changed over the course of five days.

Bitcoin Price Chart

The crypto value seems to have been locked in consolidation over the past few days. Source: BTCUSD on tradingView| Source: BTCUSD on TradingView
Featured image by Traxer, Unsplash.com. Charts from TradingView.com. CryptoQuant.com.

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