Bitcoin The trading volume has fallen in the last few days. According to data from CoinGecko, the daily Bitcoin Trading volume on major exchanges fell to a low of $14.5 billion on Monday, the lowest level since 2015.th of March.
followed by a sharp decline Bitcoin Daily trading volume soared to $70 billion earlier this month, the highest level since the collapse of FTX last November.
The drop in trading volume is worrying.
This may suggest waning investor appetite for purchases Bitcoin At the current level of $27,000, as US regulatory concerns Mt., and as fears about a US bank crisis.
This could be the result of a reduced fiat-to-crypto on-ramp in the wake of the collapse of crypto-friendly banks in the US earlier this month (most notably, the collapse of silvergate,
worry, plunge into Bitcoin The volume seen at the beginning of the month eventually turned bullish despite a drop from the mid-$22,000 to low-$20,000 levels.
Bitcoin bulls will be hoping that BTC does not experience a similar decline from the current level to the key support in the $25,000 region.
Adding to the fears of a recession is the recent Weakness seen in various metrics Measuring activity on the bitcoin network.
CFTC’s Binance Lawsuit Based on Volume
Trading volume began to drop before the announcement by US Commodity Futures and Trading Commission lawsuit against Binance, But a lawsuit definitely won’t help things.
Major market makers and institutional players involved in crypto will be more cautious about interacting with Binance if it is going to be called an unregistered/unlicensed exchange in the US.
And Binance deals with the lion’s share of crypto trading volumes. According to data presented by The Block, Binance accounted for 62% of global crypto trading volume in February, a staggering degree of market dominance.
But since they removed their zero-fee trading for bitcoin pairs, that dominance has been waning.
Much has been made within the crypto space of the recent decline in bitcoin’s so-called 2% market depth.
This is the number of buy and sell orders waiting to soak up liquidity on exchanges that are within 2.0% of the current price.
When market depth drops by 2%, it makes it easier for larger orders to move BTC price, creating a more volatile market.
Option investors remain bullish on volatility risks
Despite the ongoing decline in bitcoin’s market depth and the recent drop in trading volume, investors remain quite bullish on the risks of price volatility. That’s the message from options market pricing anyway.
Deribit’s Bitcoin Volatility Index (DVOL) has been pulling back from a prior monthly high of 73 in recent days and was at around 62.
This is well above the pre-March level in the 50 area, but is still well below historical comparisons. Deribit is the leading bitcoin derivatives exchange.
While bitcoin could be a bumpy near-term ride, many analysts believe that the long-term outlook for bitcoin remains strong.