Even with a 73% price increase in 2023, Bitcoin’s trading volume is declining sharply. According to data from Bitcoinity, the statistic is at its lowest level in the last 5 years.
The same trend can be observed in the Brazilian market. Data from MercadoCripto indicates that July had the lowest trading volume in the past 12 months.
While the drop may represent a lack of investor interest, other studies show that the number of bitcoins on exchanges is falling as well. That is, people are not interested in selling their coins.
Bitcoin volume drops
Many traders believe that volume is the most important metric in their technical analysis. After all, it can represent the interest of other investors as well as the liquidity of a particular asset.
For this group, the news is alarming. Since peaking in 2018, Bitcoin’s trading volume has already dropped by about 90%. In July, the benchmark reached its lowest level in the past five years.
While the powerhouse Binance does not appear in the chart above, probably excluded due to its zero-fee promotions, not even Changpeng Zhao exchange would save the market.
According to data from MercadoCripto, including Binance, Bitcoin trading volume reached its lowest level in the past 12 months in Brazil.
Quoting one “increasing loss of trading volume on their platform”a Brazilian brokerage announced the end of its activities this week, an example of the consequences.
While falling volume could represent the same price movement, it’s worth remembering that Bitcoin is up 73% by 2023 and major investors like MicroStrategy continue to accumulate more BTC. For example, in June, Michael Saylor’s company made its largest contribution in the past two years, ignoring possible liquidity problems.
Bitcoin price is without major changes, but the calm may end
Although the market is already used to the big candles on the charts, the price of Bitcoin has not changed much in the past two months. Cobra, owner of the Bitcoin.org website, even joked about the situation last week.
“It is time to market Bitcoin as a stablecoin.”
It’s time to market Bitcoin as a stablecoin.
— Cobra (@CobraBitcoin) August 8, 2023
In any case, everything indicates that we are in the phase of the calm before the storm. While some analysts believe the lack of volume is worrisome, pointing to a sharp decline ahead, others say the opposite.
If a spot Bitcoin ETF is approved in the US, Tom Lee believes BTC could reach BRL 900,000 per unit. One of the reasons is the lack of bitcoins on exchanges, which may be “not enough” for Wall Street investors.
Finally, the most threatened appear to be brokerage firms. In addition to strong internal competition, the arrival of giants like BlackRock and Fidelity promises to put even more pressure on them, even if their target audience is different.
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Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
