Bitcoin Summer Lull Here? Volume Plummets to Yearly Lows
On-chain data shows the Bitcoin Spot and Future Volumes have dropped to new lows, despite the price holding near $110,000.
Bitcoin Trading Volumes Are Drying Up
According to data from the on-chain analytics firm Glassnode, the Bitcoin Trading Volume related to both the spot and futures markets has recently witnessed a decline. The Trading Volume here refers to a metric that keeps track of the total amount of the asset that’s becoming involved in trading activities on the major centralized exchanges.
Here is the chart shared by Glassnode that shows the trend in the metric separately for the spot and futures sectors over the past year:
Looks like both of the indicators have witnessed a decline in recent weeks | Source: Glassnode on X
As displayed in the above graph, the Bitcoin Spot and Futures Volumes both registered a large spike when the rally beyond $100,000 took place late last year. This suggests that investors ramped up trading activity on both fronts. Generally, traders find sharp price action to be exciting, so they tend to make more moves during such periods. As such, this sharp increase in the Spot and Futures Volumes wasn’t anything too unexpected.
Activity around the cryptocurrency naturally calmed down when the coin went through its bearish phase earlier in the year, but interestingly, low activity has persisted despite BTC pushing back above $100,000 during the last couple of months. The Futures Volume did observe a spike alongside the run, but as Bitcoin started consolidating, it fell off again.
Recently, despite the coin holding near $110,000, investors have actively been losing interest as both types of Trading Volumes have been plummeting. The Spot Volume is down to $5 billion, and the Futures Volume is down to $31.2 billion. “Both are at their lowest in over a year – and still trending down,” explains the analytics firm.
The volume metrics aren’t the only ones hinting at a Summer slowdown. As Glassnode has pointed out in another X post, the Options market is echoing a similar trend.
The trend in the Options ATM Implied Volatility over the past few years | Source: Glassnode on X
The above chart shows the data for the Bitcoin Options At-The-Money (ATM) Implied Volatility. In short, what this metric shows is the future volatility expectations of the Options traders who have a strike price close to the current spot price.
From the graph, it’s visible that the indicator has recently declined on all major expiry timeframes, implying the investors are expecting lower volatility in the near future. “We’re now pricing some of the lowest vol levels since mid-2023, despite price hovering near ATHs,” notes Glassnode.
BTC Price
The Bitcoin price has again gone cold in the last couple of weeks as its value is still floating around the $108,400 level.
The price of the asset has been moving sideways | Source: BTCUSDT on TradingView
Featured image from Dall-E, Glassnode.com, chart from TradingView.com
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