The recent data indicate that the volume of Bitcoin spot trading has been consistently high over the past week, even though the price has mainly remained stable.
The volume of Bitcoin spot trading has remained steady above $10 billion.
According to a recent report, when BTC fluctuates, volumes drop. Daily trading volume tracks the total Bitcoin traded on the top 10 exchanges.
The daily trading volume, which only covers the top 10 exchanges by Bitwise, can give a good idea of overall spot market trends. These platforms offer the most reliable data in the sector, so their findings provide a more accurate market picture than looking at all market data.
When daily trading volume is high, there is significant activity in the spot exchanges, indicating that traders are currently buying and selling.
Low daily trading volume means limited activity in the BTC spot exchanges. This indicates a common trading interest in cryptocurrency at present.
Here’s a chart showing the trend of the 7-day average daily Bitcoin trading volume over the past year:
The graph above shows the 7-day average daily Bitcoin trading volume rose above $10 billion three weeks ago during a sharp price rally.
Increased activity in the spot market occurs daily during fast-changing prices as a volatile market attracts investors to trade. High trader activity sustains rallies.
Some sharp price moves in the past didn’t significantly increase Bitcoin trading volume, causing them to die off quickly. This resulted in a return to low volatility for the BTC price.
Trading volumes tend to decrease when the price stabilizes and become uninteresting to investors. However, in the past three weeks, the daily trading volume has stayed above $10 billion despite the cryptocurrency being consolidated for a week.
A lively spot market is expected when the price is rapidly changing. This volatility attracts investors and drives them to trade. This activity sustains rallies as many traders are needed to keep it going.
No slowdown in market activity may be a positive sign for Bitcoin’s upward momentum, indicating a stable foundation for the rally to continue.
BTC Price
Bitcoin is trading at $22,900, with a 1% rise in the past week.
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