Data shows that bitcoin trading volume has plummeted to extreme lows recently, a sign that investor interest in trading the asset is low.
bitcoin Trading Volume Plunges as Price Continues to Move Sideways
According to data shared by the author of CryptoQuant IT tech in an x.com/IT_Tech_PL/status/1797342129515057303″ target=”_blank” rel=”noopener nofollow”>mail, btc trading volume has been quite low recently. “Trading volume” here refers to the total amount of bitcoin participating in trading across all centralized exchanges on a given day.
When the value of this metric is high, it means that investors are currently making a large number of moves on these platforms. This trend implies that traders are interested in the currency.
On the other hand, the low metric may suggest that investors are not paying much attention to the cryptocurrency at the moment, as they are not actively trading.
Now, here's a chart showing what spot and derivatives trading volumes for bitcoin have looked like since the beginning of the year:
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The value of the metric seems to have been quite low for both types of platforms | Source: x.com/IT_Tech_PL/status/1797342129515057303/photo/1" target="_blank" rel="noopener nofollow">@IT_Tech_PL on x
As the chart above shows, bitcoin trading volume has been primarily dominated by derivatives exchanges so far this year, implying that futures and other products have garnered the most interest.
Although spot FX trading volume has generally been much lower than derivatives volume, it has still been considerable at different times throughout the year.
However, recently the spot volume has become very low. It has also been similarly low earlier this year, but what is different this time is that the latest derivatives volume has also been quite low. Therefore, volume as a whole has dried up in the bitcoin market.
As for what could be driving this trend, the answer may lie in the recent price action. Investors typically find phases where the price moves quickly exciting, so volume tends to increase in those periods as they jump in to place trades and engage in speculation.
However, when an asset is obsolete, traders get bored and start to turn their attention to greener pastures. For a while now, bitcoin has been stuck in consolidation, so it's no surprise that investors have lost interest.
It remains to be seen how long these low volumes persist before a volatile move inevitably arrives to spark a renewal of interest in the cryptocurrency.
btc Price
After witnessing a setback earlier, bitcoin has climbed back above the $70,000 level with a 3% rally over the past 24 hours. However, it is unknown if this move will finally break btc out of its recent tight range or if the asset will soon lose this rally, continuing its sideways trend.
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Looks like the price of the asset has registered an increase over the past day or so | Source: BTCUSD on TradingView
Dall-E Featured Image, CryptoQuant.com, TradingView.com Chart
