Data shows that the crash in Bitcoin’s price during early December has caused a surge in the crypto’s daily trading volume.
Bitcoin Trading Volume Shoots Up Following Early December Bloodbath
As per the latest weekly report from Arcane Research, the BTC daily trading volume saw a massive spike of $15 billion on 4th December, the day of the crash.
The “trading volume” is a Bitcoin indicator that measures the total amount of Bitcoin that was moved on the chain during a particular day.
When the value of the metric moves up, it means the market is getting more active as more holders are shifting their coins.
On the other hand, decreasing value of the indicator would suggest not many holders are moving their coins around. This may mean that investors are currently not interested in the market.
High daily trading volume values are ideal for sustaining big price moves. If the price of Bitcoin climbs up, but the volume also doesn’t rise in tandem, then usually it isn’t long before the rally is stopped out. This kind of fakeout was seen multiple times in the past few months.
Now, here is a chart that shows the trend in the value of this BTC indicator over the past year:
BTC trading volume seems to have sharply risen recently | Source: The Arcane Research Weekly Update - Week 48
As the above graph highlights, the indicator’s value showed a rapid rise in the past week. On 4th December, the trading volume noticed a massive $15 billion spike in volume.
Related Reading | The Debate Over Toxic Bitcoin Maximalism Rages On. Both Arguments After The Jump
This sudden sharp increase in the metric’s value was triggered by a BTC market crash caused by cascading long liquidations.
An interesting thing about this spike in the trading volume is that it happened on a weekend, when the indicator usually assumes calmer values compared to the rest of the week.
Related Reading | Data: Bitcoin Crash Flushed Out $5.4B In Futures Within Hours
Before this event, the daily trading volume had relatively low values as BTC’s price slowed down after setting a new all-time high (ATH).
BTC Price
At the time of writing, Bitcoin’s price floats around $49.2k, down 14% in the last seven days. Over the past thirty days, the coin has shed 23% in value.
The below chart shows the trend in the price of BTC over the last five days:
BTC's price looks to be consolidating once again | Source: BTCUSD on TradingView
Over the last few days, Bitcoin seemed to be on the path to recovery as the crypto once again broke $51k. However, today the coin’s price once again seems to have declined.
Featured image from Pixabay.com, charts from TradingView.com, Arcane Research
