Despite fear, uncertainty and doubt (FUD), Kaiko data as of January 4 sample That the cryptocurrency market is abuzz with activity as the trading volume of bitcoin, ethereum and major altcoins surpassed $40 billion on January 3, 2023.
Trading Volume Surge Hours After Cryptocurrency Sudden Drop
Notably, the sharp increase in trading volume comes despite unverified concerns that the Securities and Exchange Commission (SEC) might not approve any bitcoin exchange-traded funds (ETFs) in the future after all. January 2023.
Despite the lack of ETF approval, the crypto community remains optimistic, with bitcoin and major assets stable and halting heavy losses on January 3. At the time of writing, bitcoin prices remain stable, rejecting lower lows.
However, the January 3 bar is engulfing, bearish, and has high trading volume. Since btc prices continue to trend within this bar, sellers are in control. A break above $46,000 and a complete reversal of recent losses will invalidate this short-term bearish outlook.
bitcoin ETF Hopes and Their Eventual Approval May Boost Prices and Volume
There are a few possible explanations for the increase in trading volume. One possibility is that investors, despite unconfirmed rumors, are optimistic that the cryptocurrency and bitcoin scene will benefit.
Consequently, after the initial reaction that forced markets lower, triggering sell-offs, investors doubled down on their shares to contain losses, further driving trading volume.
Along the same lines, investors are generally hopeful about what lies ahead for bitcoin and the cryptocurrency market in general from a regulatory standpoint. As an example, the SEC is currently reviewing bitcoin ETF applications. If one or more of these applications are approved, it is estimated that billions, if not hundreds of billions, will flow into bitcoin and indirectly into major altcoins.
Overall, the increase in trading volume, as Kaiko notes, is bullish for cryptocurrencies. He points out that despite the January 3 shakeup that he saw more than 650 million dollars By value of bitcoin positions closed by derivatives exchanges, primarily OKX and Binance, the sphere's liquidity remains healthy.
Still, for now it is unknown how the market will react and how trading volume will behave in the future. As historical performance shows, the crypto scene is volatile, which can greatly influence bitcoin.
If the SEC approves bitcoin ETFs in January 2023, it could lead to a significant increase in institutional investment in cryptocurrencies. This event could further boost bitcoin and altcoin prices, raising trading volume to new levels by 2024.
Featured image from Canva, TradingView chart
