Bitcoin Bloodbath Awakens Sleepy Giant As Spot Volumes Surge
Data shows the Bitcoin carnage has awakened the dead trading volume that had persisted since many months now.
Bitcoin Trading Volume Surges To Highest Value Since December
As per the latest weekly report from Arcane Research, the latest bloodbath in the crypto market has awakened BTC’s spot trading volume.
The “trading volume” is an indicator that measures the total amount of Bitcoin being moved on the chain on any given day.
When the value of this metric rises, it means the market is becoming more active as investors trade larger amounts of the crypto.
On the other hand, a downtrend in the indicator suggests the Bitcoin market activity is going down at the moment.
Historically, high trading volumes have made up for an ideal environment for pushing large price moves. This is because to sustain any such move, a large number of active traders are needed.
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It’s also true that any significant price move attracts more traders in return as interest in Bitcoin goes up. Thus, it fuels itself to keep going. In cases when the volume hasn’t surged up in response to a move, the move hasn’t lasted for long before dying off.
Now, here is a chart that shows the trend in the BTC trading volume over the past year:
Looks like the value of the metric has surged up recently | Source: Arcane Research's The Weekly Update - Week 18
As you can see in the above graph, the Bitcoin trading volume had been very quite since a couple of months now.
However, this week the indicator’s value has sharply spiked up as the market has panicked due to the crash in the crypto’s price.
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On Monday, the daily trading volume amounted to around $13 billion in Bitcoin travelling on the network. This is the highest the value of the metric has been since the 4th of last December.
It now remains to be seen whether the fresh spot volumes will remain to the next week, or if the market will once again fall back to sleep when the selloff is over.
Bitcoin’s price has now crashed down to lesser values than the low formed in summer 2021. At the time of writing, the coin trades around $28.1k, down 28% in the last seven days. Over the past month, the crypto has lost 29% in value.
The below chart shows the trend in the price of the coin over the last five days.
The value of the crypto seems to have crashed down over the last few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research