Bitcoin Trading Volume Stabilizes At Lows Of July 2021 As Market Sleeps
Data shows the weekly average Bitcoin trading volume has stabilized around the same lows as July 2021 as market activity remains low.
Bitcoin Trading Volume Has Stayed Low In Recent Weeks
According to the latest weekly report from Arcane Research, the BTC trading volume has sunk down to July lows recently.
The “trading volume” is an indicator that measures the total amount of Bitcoin being transacted on the chain in a day.
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On the other hand, a downtrend in the indicator implies the Bitcoin market is turning more inactive currently. This may show a general lack of interest in the crypto among investors at the moment.
Now, here is a chart that shows the trend in the BTC trading volume over the past year:
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As you can see in the above graph, the daily Bitcoin spot trading volume has struggled a lot recently, and has declined to 7-day average values of around just $3 billion.
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The metric is now at the same lows as July of last year. Back then, the price had been consolidating sideways for a couple of months following the May crash.
Bitcoin Price Surges Above $42k, Can It Revive The Volume?
Usually, periods of high trading volumes have been when the price of BTC has successfully made some large moves. It’s because to sustain any such move, the market needs a high number of active traders.
Related 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. The below chart shows the trend.
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. It now remains to be seen which scenario will play out this time.
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research