Data shows the Bitcoin spot trading volume has declined to lows not seen since the selloff in the summer of 2021.
Bitcoin Trading Volume Sinks To Lowest Level Since Summer Selloff
As per the latest weekly report from Arcane Research, the BTC spot volume has observed a significant drop off in the last week, taking it to the lowest value in six months.
The “trading volume” is an on-chain indicator that measures the total amount of Bitcoin that changed hands on any given day.
When the value of this metric rises, it means activity in the BTC network is going up as a larger amount of coins see movement. Historically, such an environment has usually been the ideal one for big price moves as a large number of traders are needed to sustain such moves.
There have been many instances in the past where the price of Bitcoin began to show some sharp trend, only for the move to die out soon after because the trading volume never rose in response.
On the other hand, when the trading volume assumes low values, it implies not many holders are moving their coins at the moment. Such low network activity may suggest that investors are waiting for specific price levels before they move their assets. It may also be a sign of generally low interest in the BTC market.
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Now, here is a chart that shows the trend in the BTC spot trading volume over the last year:
Looks like the value of the indicator has declined recently | Source: The Arcane Research Weekly Update - Week 2
As you can see in the above graph, the Bitcoin trading volume has dropped off in the past week. The indicator’s value is now the lowest it has been in the last six months.
BTC has been stuck in consolidation for a while now so the low volatility could be one of the reasons why investors are feeling hesitant to make any moves right now.
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The last time such low values were seen was back in summer of last year, where the trading volume remained at similar levels for a while as BTC continued sideways movement.
At the time of writing, Bitcoin’s price floats around $41.9k, down 2% in the last seven days. Over the past month, the crypto has lost 10% in value.
The below chart shows the trend in the price of BTC over the last five days.
BTC's price seems to have declined in the last few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research