According to data, Bitcoin trading volume is once again on the way down as the cryptocurrency fails to reach the $ 50,000 mark.
Bitcoin Trading Volume Declines
According to a report by Arcane Research, BTC has not yet managed to test the $ 50,000 mark-but the trading volume is already moving downwards.
The real Bitcoin trading volume is an indicator that shows the amount of coins traded during a certain period of time. The 7-day average shows the daily Bitcoin trading volume calculated using a weekly average.
If the value of the measure increases, it means that more investors are interested in trading the cryptocurrency. This is usually the case when BTC has high volatility. At such times, buyers tend to change their positions in the market, so more transactions take place on the network.
On the other hand, if the market has low volatility and the price moves sideways, trading volume tends to decline.
As the chart above shows, BTC trading volume initially began to decline after reaching a peak earlier this month. However, the indicator quickly recovered and again reached a similar level of about $7 billion.
But now the trading volume seems to be moving down again – the value of the key figure has fallen to $ 5 billion. The reason for this decline is likely to be the stagnant Bitcoin price over the past week.
The behavior is not particularly worrying at the moment. A slowdown in price activity simply means that fewer buyers are interested in the market.
Currently (time of this article) the Bitcoin price is moving around $44,4 k, a decrease of 1,8% in the last 7 days. Over the past month, the cryptocurrency has gained 49% in value.
Here is a chart showing the price development of the coin in the last three months:
Last month, BTC recorded a strong uptrend when the price rose from $ 30,000 to about $ 48,000. This trend eventually subsided, and the price moved sideways over the past week.
Today, Bitcoin had a small slump as the price has dropped from above $47k to below $44k. It’s unclear how things will go from here.
If BTC soon breaks through the $50k range, the market will need an increase in trading volume. However, if the price moves up without a sharp increase in trading activity, it could mean that the market is exhausted. In such a situation, the price increase is no longer sustainable – and a crash could occur.
Text credit: Bitcoinist
Last updated on August 19, 2021
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