Hitting its highest level since the collapse of the FTX crypto exchange last November thanks to significant volatility and zero trading fees B T c Pairs on Binance, Spot Bitcoin There has been a significant drop in trading volume.
According to data pulled from CoinGecko’s API, Spot Bitcoin Trading volume on major exchanges stood at around $16.4 billion on Friday.
It’s close to $70 billion this time last month.
And it’s not just spot volume that has weakened recently.
According to data presented by crypto analytics website The Block, as of mid-April, Bitcoin The month-to-month futures trading volume has only reached about $350 billion.
For the entire month of March, bitcoin futures traded around $1.3 trillion in volume.
According to another chart presented by The Block, options trading volumes are also tracking for a weak month.
Is Weak Volume a Threat to the Bull Market Thesis?
Some may interpret the weak trading volume as a sign of softening demand for bitcoin.
While it is true that previous major trading volume spikes have coincided with price spikes, such as for bitcoin in the first half of 2021, the correlation between high volumes and high prices is tenuous.
This is shown by the fact that bitcoin has been able to continue its upward movement in recent weeks, despite the low trading volume.
Indeed, the price of BTC soared above $31,000 on Friday for the first time since last June, bringing its gains to nearly 7.0% for the month – a month that has seen volumes drop significantly compared to March.
For now, while a trading volume spike would be welcome (if driven by an inflow on new demand for bitcoin), the BTC price may well be able to continue pushing higher.
This is because bitcoin has very significant tailwinds right now.
Bitcoin Will Continue to Benefit from Technical, Macro and On-Chain Tailwinds
Chart analysis shows that a sustained increase in bitcoin price remains a distinct possibility.
Since breaking north of last month’s high in the mid-$29,000s, it has now opened the door for BTC to hit the next key resistance area around $32,300 (end-May/June 2022 high) Has gone.
All major moving averages for BTC have been trending up in a consistent order and the 21-day moving average recently offered strong support, voicing confidence in bitcoin’s short-term momentum.
Other longer-term technical signals from key moving averages are also positive.
Bitcoin’s powerful rally from a mid-March retest of the 200 DMA (and real value) below $20,000 was interpreted by many as confirmation of a bull run at the time, which continues to offer tailwinds.
Furthermore, the golden cross achieved by BTC price in early February – historically a very bullish sign for BTC – is another long-term technical tailwind for price action.
Bitcoin’s 14-day Relative Strength Index (RSI) is flirting with being in the overbought zone, suggesting that the risk of short-term profit-taking is increasing.
But that doesn’t stop BTC from always continuing in a good run of short-term gains, the recent price rally from mid-January to February being a good example.
The positive on chain trends also indicate that the trading bias of bitcoin will definitely remain up in the medium to long term.
First, core on-chain metrics related to network usage (which thus act as a proxy of “demand” for the bitcoin network).
According to data presented by crypto analytics firm Glassnode, metrics such as daily active address number, number of addresses with non-zero balances, number of new addresses and number of daily transactions continue to trend higher.
Meanwhile, other on-chain metrics, such as those monitored in Glassnode’s “Recovering from a bitcoin bear” dashboard, are all shouting bullish market.
This dashboard tracks eight indicators to determine whether bitcoin is trading above key pricing models, whether network utilization is gaining momentum, whether market profitability is returning, and whether the USD- The balance of denominated bitcoin money favors long-term HODLers.
All eight indicators have been glowing more or less in the green since mid-March, the longest such period in two years.
Historically, the moment when all the indicators on the dashboard turn green (i.e. now) have been a great buying opportunity for a long period.
If the American economy is headed recession And deflation and a Fed interest rate cut cycle Coming in, the macro conditions are on course for a continued bitcoin bull market.
This is not to mention the widely anticipated continuation of bitcoin (and more generally, crypto). global adoptionWhich is actually the main long term bullish argument.