Data shows the Bitcoin spot trading volumes have remained at high values during the past week despite the price mostly moving sideways.
Bitcoin Spot Trading Volumes Have Stabilized Above $10 Billion
As per the latest weekly report from Arcane Research, usually, the volumes drop when the BTC price starts to range. The “daily trading volume” is an indicator that measures the total amount of Bitcoin being transacted on the Bitwise 10 exchanges on any given day.
Even though the metric only accounts for the Bitwise 10 exchanges, the indicator can still be used as a decent approximation for the trend in the entire spot market. These platforms also provide the most reliable data in the sector, so the picture painted by them is more accurate than just assessing the entire market’s data.
When the value of this metric is high, it means investors are moving around large amounts on the spot exchanges right now. Such a trend shows traders are active in the market currently.
On the other hand, low values suggest the BTC spot exchanges aren’t observing much activity at the moment. This kind of trend can be a sign that there isn’t much trading interest around the cryptocurrency currently.
Now, here is a chart that shows the trend in the 7-day average Bitcoin daily trading volume over the past year:
As displayed in the above graph, the 7-day average Bitcoin daily trading volume surged around three weeks ago to values exceeding $10 billion as the price of the asset saw a sharp rally.
It’s not unusual for the spot market to become highly active as the price observes rapid action, as a volatile market is what excites many investors and encourages them to make some trades. It’s also actually this fresh activity that keeps rallies like these going since a high number of active traders are needed to sustain such moves.
There have been some sharp price moves in the past that didn’t accompany any significant rises in the Bitcoin trading volume for an appreciable period of time, and hence they naturally died off after only a short while, with the BTC price returning to low volatility again afterward.
Also, trading volumes generally wind down when the price starts ranging and becomes “boring” to investors. In the past three weeks, however, the indicator has remained around the same higher than $10 billion levels, despite the fact that the cryptocurrency’s value has been stuck in consolidation during the last week or so.
There not being any noticeable slowdown in the market activity could be a positive sign for Bitcoin’s current upwards push, as it shows that there is still a sustainable ground for the rally to pick itself back up.
BTC Price
At the time of writing, Bitcoin’s price floats around $22,900, up 1% in the last week.
