Bitcoin transaction volume has been fluctuating in recent weeks following events such as the Terra crisis. A few weeks ago, in particular, data showed that the 7-day average of Bitcoin spot trading volume had spiked as trading activity in the market picked up.
The Bitcoin market had more than 10,000 million dollars of volume in weekly
According to a recent weekly report from Arcane Research, BTC trading volume has seen new growth a few weeks ago. “Daily trading volume” is a indicator that measures the total amount of Bitcoin changing hands on a given daythat is, the volume in 24 hours.
When the value of this metric drops, it means that fewer coins are being traded on the chain at the time. Decreasing cash and transaction volumes may suggest that interest in cryptocurrency among investors is waning. right now.
More activity on the Bitcoin network
Secondly, an increasing volume shows that the network is becoming more active as more BTC watches the move. Historically, high volumes have made for an ideal environment for big moves in the price of Bitcoin. This is because in order to sustain any such move, a large number of active traders are needed. It is also true, however, that large price movements themselves also attract more traders, thereby increasing volume and feeding itself.
Accumulation in the area of 30 thousand dollars
There have been cases in the past where a large price move was not supported by increasing volume. Bitcoin trading volume has seen a sharp increase in recent weeks with a peak in the second week of May with more than 5,167,807 BTC in Binance futures only in that week. Since then, a volume of around 2.5 to 3 million BTC has been maintained on a weekly basis.
It is worth noting the drop in the price of Bitcoin to the $30,000 area on May 9 and a relapse to $27,000 some 72 hours later, marking the lows of this accumulation phase for the time being. The recent general decline in the cryptocurrency market and the collapse of LUNA are the main triggers for this sharp increase in spot volume.
What effect does volume have on the price of BTC?
In the week of May 9, four of the seven trading days saw the value of the metric break the $10 billion mark. The weekend saw less activity, but volumes were still double the average of the weekend last month. The average value of those 7 days of the indicator was hovering just below the highest of the year observed in January.
The new activity has remained more subdued in the coming weeks and so far no noticeable price movement has been seen either.. The positive side is that BTC seems to have consolidated the bottom and it remains to be seen when it goes back up to look for the previous values, the first step would be to break the zone of 31 thousand dollars.
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