Data shows that the Bitcoin carnage has awakened dead volumes that have been around for months.
Bitcoin volume surges to highest level since December
According to the latest weekly report Arcane Researchthe latest bloodbath in the cryptocurrency market has awakened the spot trading volume of BTC.
this”Trading volume” is a measure of the total amount of Bitcoin moving on-chain on any given day.
When the value of this indicator rises, it means that the market becomes more active as investors trade large amounts of cryptocurrencies.
On the other hand, the downtrend of this indicator indicates that Bitcoin market activity is currently declining.
Historically, high trading volume has compensated for an ideal environment that drives large price swings. This is because a large number of active traders are required to sustain any such move.
As interest in Bitcoin rises, it is also true that any major price movement will attract more traders in return. So it fuels itself to keep going. If the volume doesn’t spike due to the move, the move doesn’t last long before disappearing.
Now, this chart shows the trend of 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 graph above, Bitcoin trading volume has been very stable for several months.
However, the value of the indicator rose sharply this week as the market collision in the price of cryptocurrencies.
Related reading | Extreme fear is back in focus: Is it time to buy Bitcoin?
On Monday, about $13 billion in daily Bitcoin transactions were transferred across the network. This is the highest value for the indicator since December 4 last year.
It remains to be seen if the new spot volume will continue into next week, or if the market will fall asleep again when the sell-off ends.
price of bitcoin It has now fallen below the value of the lows formed in the summer of 2021. At the time of writing, the coin is trading at around $28,100, down 28% in the past seven days. The cryptocurrency has lost 29% in value over the past month.
The chart below shows the trend of the coin’s price over the past 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