Data shows the Bitcoin trading volume has dropped to its lowest level in 14 months, signaling that FOMO around the crypto may be no more.
Bitcoin Trading Volume Sinks To Lows Not Seen Since December 2020
As per the latest weekly report from Arcane Research, the BTC trading volume has continued its decline this week, reaching the lowest values in around fourteen months.
The “daily trading volume” is an on-chain indicator that measures the total amount of coins being transacted on the Bitcoin blockchain on any given day.
When the value of this metric rises, it means the amount of BTC changing hands is increasing. High values of the indicator show that the network is quite active at the moment. These values are typically seen during big price swings.
On the other hand, when the volume decreases, it implies that the Bitcoin network activity is going down. Such a trend may mean that investors are currently waiting for the price to reach a certain level before they make their moves. It can also imply a general disinterest in the the market right now.
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 declined recently | Source: The Arcane Research Weekly Update - Week 7
As you can see in the above graph, the Bitcoin trading volume has been on a downtrend for a while now, implying the network is becoming more inactive.
On this Saturday, the metric observed a low not touched since 7 December 2020, about fourteen months ago. The daily volume was just $1.7 billion on this day.
Such low activity may indicate that traders are no longer falling for the BTC fear of missing out (FOMO) as the general interest around the coin stands at a historic low.
This trend can be quite bearish for the crypto’s price as a large number of traders are required to sustain any big move. Without them, the price may only move sideways for a while.
Bitcoin’s price sharply declined recently and touched as low as $36.4k, but has since recovered some. At the time of writing, the coin’s price floats around $38.8k, down 13% in the last seven days. Over the past month, the crypto has gained 10% in value.
The below chart shows the trend in the price of BTC over the last five days.
BTC's price seems to be making a bit of recovery after the plunge a couple of days back | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research