Data shows the Bitcoin spot trading volume has soared in the past week as prices have become attractive for traders again.
Bitcoin Trading Volume Sharply Rose Following The Price Crash
As per the latest weekly report from Arcane Research, the BTC spot volume has observed a large increase over the last week.
The “trading volume” is an on-chain indicator that measures the total amount of Bitcoin being transacted on the network on any given day.
When the value of the metric rises, it means the chain activity is going up as traders move their coins. Since any big price move up requires a lot of traders to participate, this kind of trend makes up for an ideal environment for sustaining such moves.
On the other hand, when the indicator’s value goes down, it implies that the Bitcoin network activity is currently dropping.
This trend could mean that investors don’t want to move their coins at the current levels. It may also mean that the general interest surrounding the crypto is low at the moment.
Related Reading | Crypto Correlation: Comparing Bitcoin And The S&P 500 Flat Correction
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 seen a sharp increase in the last few days | Source: The Arcane Research Weekly Update - Week 3
As you can see in the above graph, the Bitcoin trading volume soared to $11 billion this Friday as the price of the coin fell below $40k.
Since then, the indicator’s value has stayed high. On Monday, the daily spot volume had another surge of more than $10 billion volume as the price of the crypto plunged below the $35k mark.
Before this event, the trading volume had been very low since quite a while. It seems traders were waiting for BTC to drop below $40k to make their move.
As activity has returned to the Bitcoin market, and traders are buying at these attractive prices, it’s possible the bottom might have already formed.
At the time of writing, Bitcoin’s price floats around $38k, down 10% in the last seven days. Over the past month, the crypto has lost 25% in value.
The below chart shows the trend in the price of BTC over the last five days.
BTC's price seems to have enjoyed some uptrend over the last couple of days | Source: BTCUSD on TradingView
After the crash to $33k, Bitcoin’s price has finally showed some recovery over the last couple of days. If the trading volume is anything to consider, the bottom may already be in.
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research
Source: Bitcoinist News