Bitcoin Volume Up After Rally, But Very Below H2 2022 Levels

Data shows the Bitcoin spot trading volume has slightly gone up after the rally but is still significantly lower than the average for the 2nd half of 2022.

Bitcoin Spot Trading Volume Has Gone Up A Bit This Week

As per the latest weekly report from Arcane Research, there has been low speculative activity in the BTC market recently. The “trading volume” is an indicator that measures the total amount of Bitcoin being transacted on the Bitwise 10 exchanges on any given day.

While the volume on the Bitwise 10 exchanges is certainly not all the activity there is in the entire BTC market, the reason why they have been chosen is that their data is the most reliable available out of all the platforms, and their volumes still provide a decent approximation for what the trend in the complete sector looks like.

When the value of the trading volume is high, it means a large number of coins are being moved across these exchanges right now. Such a trend suggests traders are active in the Bitcoin market currently.

On the other hand, low values imply not many investors are trading the cryptocurrency. This kind of low activity can be a sign that the general interest in the coin is low at the moment.

Now, here is a chart that shows the trend in the 7-day average Bitcoin trading volume over the past year:

Looks like the 7-day average value of the metric hasn't been too high in recent days | Source: Arcane Research's Ahead of the Curve - January 10

As displayed in the above graph, the Bitcoin 7-day trading volume recently slumped to low values as the crypto had been stuck in endless consolidation.

In the last few days, however, the indicator has seen some growth as the latest rally in the price to $17,400 has slightly renewed trading interest in the coin.

Nevertheless, from the chart, it’s apparent that these current values are still substantially lower than the average observed during the second half of last year. This would suggest that not enough activity has returned to the market yet.

Usually, any rallies in the price require a large number of traders to be sustainable; there have been some instances in the past where a sharp price move wasn’t accompanied by an increase in trading activity, and so it wasn’t long before the movement lost momentum.

There hasn’t been any significant increase in the trading volume with the current rally, but the fact that there has still been a rise at all may be a positive sign for this move.

The report notes that one implication of the latest low trading volumes has been that the revenues of exchanges have taken a hit. This has led to the crypto exchange Coinbase cutting around 950 positions, as announced yesterday.

BTC Price

At the time of writing, Bitcoin is trading around $17,400, up 3% in the last week.

Bitcoin Price Chart

BTC seems to have observed an uplift in the last few days | Source: BTCUSD on TradingView

Featured image from Traxer on, charts from, Arcane Research

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