Bitcoin Trading Volume Dips Without New $ 50,000 Litigation

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Data shows Bitcoin’s trading volume is on the decline again as the cryptocurrency fails to retest the $ 50,000 mark.

Bitcoin trading volume decreases

According to a report from Arcane Research, although BTC has not yet been able to test the $ 50,000 range, trading volume is already falling.

Bitcoin’s actual trading volume is an indicator that shows the amount of coins traded during a specific period of time. The 7-day average daily metric displays the daily trading volume as calculated using a weekly average.

When the value of the metric increases, it means that more investors are interested in trading the cryptocurrency. This is usually the case when BTC displays high volatility. During these times, buyers tend to change their position in the market so that more transactions occur on the network.

Related reading | Bitcoin sets new all-time high for ‘active money’

On the other hand, if the market shows low volatility with a sideways price, the trading volume tends to drop.

Bitcoin Trading Volume Declines Again | Source: Arcane Research

As the chart above shows, the volume of BTC trading initially started to decline after peaking earlier in the month. However, the indicator rebounded quickly, again reaching similar levels of around $ 7 billion.

But now the trading volume appears to be dropping again, with the value of the metric dropping to $ 5 billion. The reason for the drop is likely the flat price of Bitcoin over the past week.

The behavior is not of particular concern at the moment, as the slowdown in price activity means fewer buyers would be interested in the market.

BTC price

As of this writing, the price of Bitcoin is moving around $ 45.8,000, down 1.5% over the past 7 days. Over the past month, the cryptocurrency has gained 49% in value.

Here is a chart showing the coin’s price trend over the past three months:

After Crash Below $ 45,000, Bitcoin Seems to Rise Again | Source: BTCUSD on TradingView

Over the past month, BTC has seen a strong uptrend, with the price dropping from $ 30,000 to around $ 48,000. The trend eventually subsided when the price started moving sideways over the past week.

Today, Bitcoin has seen a slight decline as the price has dropped from over $ 47,000 to under $ 45,000. Although, for the moment, the coin seems to be going up again.

Related reading | 50 years later: why Bitcoin is the new gold standard

If BTC is to break the $ 50,000 range anytime soon, the market will require an increase in trading volume. However, if the price rises without a sharp increase in trading activity, it could mean that the market is exhausted. In such a situation, a price increase becomes unsustainable and a crash can occur.

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