The daily transaction volume on the Bitcoin network has fallen by more than 20% in recent weeks. according to Report From Block, the weekly chart last Sunday (6) recorded about 217 thousand transactions. The last time the index reached that area was in August 2018.
In addition, the amount of dollars on the network per day decreased by 55%, from 17.3 billion US dollars to 7.7 billion US dollars. Although the scenario is not very optimistic, experts explain that a change in this metric may indicate new recoveries.
Also, other technical indicators of BTC have also been affected, such as the current confused relationship between long and short positions. At the time of writing this article, the numbers indicate frequency.
The volume of daily transactions on the Bitcoin network has fallen to three-year levels. On August 31, 2018, the number of processes in the ecosystem reached 21,715 thousand.
The decline comes after a series of corrections in the market. Part of this decline is attributed to Elon Musk’s statements and the Chinese government’s restrictions on Cryptocurrency.
Currently, Bitcoin is fluctuating with a margin of $36,000. A devaluation of 43.7% compared to its historic high of $64,000.
In addition, data from Glassnode indicates a high volume of withdrawals on exchanges this month. According to the report, the number of withdrawals is the highest since November 2020.
Analysts generally associate cryptocurrency output from exchanges with a positive signal. It is believed that cryptocurrencies are being moved to more secure storage as traders expect greater appreciation.
Amid this scenario, buy and sell orders – Long e short Presenting an indecisive market. Survey Binance, for example, indicates that 50.3% of investors are betting on a long-term price increase.
Meanwhile, about 49.7% of investors are betting down.
What do the experts say?
The volume metric is considered the most important by 38% of experts, according to a survey by CoinDesk Markets.
“Size, without a doubt, is the most important aspect outside of price. […] For many other technical indicators, volume can be a confirmation or rejection of a hypothesis,” Matt Thompson, director of business development and operations at Coinigy for CoinDesk.
Analysts use the indicator to plot the advantages of trading. It is understood that if the price of Bitcoin It decreases with volume, a possible reversal will occur soon in the market.
The same can happen if the price goes up at the same time as the volume goes down. This sign is a strong indicator of regression. This means that the scale can be negative initially.
However, it is believed that the sideways market decline in volume – the current state of bitcoin – leaves room for different outcomes. In the event that the price rises with higher volume from here, an upward trend can be expected in the short term.