Bitcoin trading volume this month hit its lowest level in nearly five years as investors are still waiting for reasons to return to the market. CryptoQuant’s analysis of data from exchanges shows that the total volume of bitcoin held on all exchanges fell this month to the lowest since 2018 and has failed to recover.
The lowest level since 2018
As of Aug. 26, trading volume on all exchanges totaled 129,307 bitcoins, according to CryptoQuant. Two weeks earlier, on Aug. 12, it had fallen to 112,317 bitcoins, the lowest level since Nov. 10, 2018. That was down about 94 percent from the March high of 3.5 million bitcoins.
However, the price of bitcoin has risen this year. According to Coin Metrics, it is up 57 percent and hovering around $26,100.
Seasonality as a cause
It has been an exceptionally quiet summer for bitcoin traders. One reason for the low volume is seasonality. But the main reason is the crackdown on cryptocurrencies by US regulators, combined with the end of the banking crisis in May, which accounted for most of the year’s gains. These have driven traders out of the market and they have not yet had reason to return.
“Overall, the market has remained lacklustre, waiting for a new catalyst, and overall market liquidity remains scarce,” said Bernstein analyst Gautam Chhugani. “This market is not necessarily bearish, but participants remain uninterested in trading as the market awaits catalysts,” he added. A bear market is defined as one that has been declining for a long time and a generally negative sentiment prevails in the market.
Source Czech Press Office
