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Data shows Bitcoin trading volume is once again on its way downwards as the cryptocurrency fails to retest the $50,000 mark.
Bitcoin Trading Volume Goes Down
As per a report from Arcane Research, while BTC hasn’t been able to test the $50k range yet, the trading volume is already moving downwards.
The real Bitcoin trading volume is an indicator that shows the amount of coins transacted 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 goes up, it means more investors are interested in trading the cryptocurrency. This is usually the case when BTC is showing high volatility. During such periods, buyers tend to change their positions in the market so more transactions happen on the network.
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While on the other hand, if the market is showing low volatility with the price moving sideways, trading volume tends to move downwards.
Bitcoin's trading volume once again decreases | Source: Arcane Research
As the above graph shows, the BTC trading volume initially started going down after making a peak earlier in the month. However, the indicator quickly rebounded as it reached similar levels of around $7 billion again.
But now the trading volume seems to be once again moving downwards as the metric’s value drops to $5 billion. The reason behind the drop is likely the flat Bitcoin price over the past week.
The behavior isn’t particularly worrying as of now, since price activity slowing down means less buyers would be interested in the market.
BTC Price
At the time of writing, Bitcoin’s price moves around $45.8k, down 1.5% in the last 7 days. Over the past month, the cryptocurrency has gained 49% in value.
Here is a chart showing the trend in the price of the coin over the past three months:
After a crash below the $45k mark, Bitcoin once again seems to be moving back up | Source: BTCUSD on TradingView
Over the past month, BTC has enjoyed a sharp streak of upwards trend as the price went from $30k to about $48k. The trend eventually subsided as the price started moving sideways over the last week.
Today, Bitcoin had a small dip as the price dropped down from above $47k to below $45k. Though, as of right now, the coin seems to be going back up again.
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If BTC has to break the $50k range soon, the market will require a spike in the trading volume. However, if the price moves up without a sharp rise in the trading activity, it could mean the market is exhausted. In such a situation, a price rise becomes unsustainable, and a crash may happen.