After a series of downturns, positive enthusiasm has returned to Bitcoin [BTC] and the cryptocurrency market. The total market capitalization is now $1.41 trillion. Bitcoin’s trading volume has declined dramatically in recent months as a result of the erratic price movement. The figure is currently hovering around levels last seen nearly nine months ago.
This was uncovered by Santiment, a crypto-analytic tool, which stated that individual Bitcoin investors will now have a greater impact on markets. According to the tweet,
“Bitcoin’s daily trading volume is hovering around October 2020 low levels. These 9-month lows don’t necessarily indicate a price drop for $BTC. This simply means that individual trades will have a larger impact on markets.”
The summer doldrums may have had a role in the market’s low volumes and dismal performance. According to Sam Kopelman, Luno’s UK country manager, money managers de-risking their portfolios due to turmoil in traditional markets and macroeconomic concerns about the pandemic’s effects is another driver for the ongoing trend.
Bitcoin market undecided?
The fact that BTC supply is constantly being transferred off of crypto exchanges demonstrates Bitcoin’s tremendous recovery over the previous week. BTC supply on exchanges is currently increasing, approaching levels last seen in the first week of January.
While the market may be on the mend, investors are still in hot water. Overall, the cryptocurrency’s short-term outlook may be described as indecisive, with mixed signals emanating from all directions. The crypto-asset requires an equally big trading volume to provide a significant positive impulse. The resulting divergence may lead to a correction in the following days.
Institutions often slow down their activities during the summer months, therefore the retail club can be regarded to be the market’s most recent strength.
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