Data shows the Bitcoin trading volume has continued to remain at low levels this week, weakening the latest rally in the crypto’s price.
Bitcoin Spot Trading Volume Has Recently Stabilized At Low Values
As per the latest weekly report from Arcane Research, the BTC spot volume has continued to stabilize at relatively low values this week.
The “daily trading volume” is an on-chain indicator that measures the total amount of Bitcoin being transacted on the network on any given day.
When the value of this metric goes up, it means a higher number of coins are moving on the chain at the moment. This shows that the network is turning more active as investors become more interested in the crypto.
On the other hand, a decrease in the Bitcoin volume suggests market activity is dipping down. Such a trend may imply that the general interest around the coin is low right now. It can also mean investors are waiting for the price to reach a certain level before they make their move.
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Now, here is a chart that shows the trend in the 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 graph, the Bitcoin trading volume has stabilized since a while now, and this week looks to have continued that trend.
While this has meant the volumes haven’t dropped further recently, their value has nonetheless been quite low in the past weeks.
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Since any large price move requires a large amount of traders participating for it to be sustainable, the most recent rally in the value of Bitcoin has already lost momentum due to the low volumes recently.
At the time of writing, Bitcoin’s price floats around $44.8k, down 5% in the last seven days. Over the past month, the crypto has gained 13% in value.
The below chart shows the trend in the price of the coin over the last 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, the price of Bitcoin looks to have dropped off below the $45k level again today.
Currently, it’s unclear when upwards momentum may return to the crypto. But one thing seems to be clear, any new rallies would need to be backed up by surging trading volumes otherwise that rally too shall lose its spark before long.
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research