Data shows that bitcoin trading volume has continued to remain at low levels this week, dampening the recent rally in the cryptocurrency’s price.
Spot Bitcoin Trading Volume Recently Stabilized At Low Values
According to the latest weekly report from obscure researchBTC spot trading volume has continued to stabilize at relatively low values this week.
The “daily trading volume“It is an on-chain indicator that measures the total amount of bitcoin that is being traded on the network on any given day.
When the value of this scale goes up, it means that more coins are moving on the chain at the moment. This shows that the network is becoming more active as investors become more interested in cryptocurrencies.
On the other hand, a decrease in Bitcoin’s volume indicates a decrease in market activity. This trend could mean that public interest around the coin is currently low. It can also mean that investors wait for the price to reach a certain level before making a move.
Related reading | Monthly Bitcoin outflows reach historically high value
Now, here is a chart showing the trend in BTC trading volume over the past year:
Looks like the value of the indicator has been moving sideways recently | Source: Arcane Research's The Weekly Update - Week 13, 2022
As you can see in the above chart, bitcoin trading volume has been flat for a while now, and this week it appears that this trend has continued.
While this means that volumes haven’t gone down more recently, their value has nonetheless remained very low In the past weeks.
Since any major price movement requires the participation of a large number of traders in order to be sustainable, the recent rally in the value of Bitcoin has already lost momentum due to the recent decline in trading volumes.
At the time of writing this report, Bitcoin price It is floating around $44.8K, down 5% in the past seven days. Over the past month, the value of the cryptocurrency has gained 13%.
The chart below shows the currency price trend over the past five days.
BTC's price seems to have plunged down over the past twenty-four hours | Source: BTCUSD on TradingView
After moving sideways for a few days, Bitcoin price appears to have dropped below the $45K level again today.
Currently, it is unclear when the bullish momentum might return to the cryptocurrency. But one thing seems clear, that any new rallies will need to be supported by higher volumes or else this rally too will lose its spark before long.
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research