Data shows Bitcoin spot trading volume has remained at high values over the past week even though the price is usually moving sideways.
Bitcoin Spot Trading Volume Has Stabilized Above $10 Billion
As per the latest weekly report from Arcane Research, usually, the volume decreases when the price of BTC starts to fluctuate. “Daily trading volume” is an indicator that measures the total amount of Bitcoins transacted on the Bitwise 10 exchange on a given day.
Although the metric only records Bitwise 10 exchanges, the indicator can still be used as a suitable approximation of the trend in the entire spot market. The platform also provides the most reliable data in the sector, so the picture painted is more accurate than simply evaluating the data of the entire market.
When the value of this metric is high, it means that investors are circling a large amount in the current spot exchange. The trend indicates active traders in the current market.
On the other hand, the low values indicate that the exchange of BTC points is not very active at the moment. A trend like this could be a sign that there isn’t much trading interest around digital currencies right now.
Now, here’s a chart showing the trend in the 7-day average of Bitcoin’s daily trading volume over the past year:
Looks like the value of the metric has been pretty high in recent days | Source: Arcane Research's Ahead of the Curve - January 31
As shown in the chart above, the average 7-day Bitcoin daily trading volume surged around three weeks ago to a value exceeding $10 billion as the asset price saw a clear rally.
It is not unusual for the spot market to be very active because the price moves so quickly, because the volatile market has surprised many investors and encouraged them to make some trades. It is actually this fresh activity that creates a rally like this because many active traders are needed to sustain the movement.
There have been some sharp price changes in the past that were not accompanied by an increase in Bitcoin trading volume for a sufficient period of time, and therefore they died down after a while, with the price of BTC returning to low volatility. again after.
Also, the trading volume generally decreases when the price starts and becomes “boring” for investors. However, in the last three weeks, the indicator has remained above the $10 billion level, despite the fact that the value of the cryptocurrency has been stuck in consolidation for the past week or so.
The absence of a visible crash in market activity could be a positive sign for Bitcoin’s current push up, as it shows that there is still a sustainable place for the rally to back up.
BTC price
At the time of writing, the price of Bitcoin is floating around $22,900, up 1% over the past week.
The value of the asset continues to move sideways | Source: BTCUSD on TradingView
Featured images from André François McKenzie on Unsplash.com, charts from TradingView.com, Arcane Research