Bitcoin Trading Volume Plummets Down From Recent Top

Data shows the Bitcoin spot trading volume has once again come back down to normal values for 2022 after the big surge recently.

Bitcoin Trading Volume Falls Back Down To Values Around $4 Billion

As per the latest weekly report from Arcane Research, the Bitcoin trading volume has plummeted back down after the recent high values.

The “daily spot trading volume” is an indicator that measures the total amount of Bitcoin moving on the chain on any given day.

When the value of this metric goes up, it means the number of coins changing hands on the network is increasing. Such a trend can be a sign that interest around the crypto among investors is rising right now.

On the other hand, a downtrend in the volume would suggest that market activity is going down. This trend may imply that the general interest around the crypto could be diminishing.

Historically, high values of the indicator have provided for a favorable environment to push large moves in the price of Bitcoin.

Related Reading | Investors May Expect Downside For Bitcoin And Ethereum Market For The Next 3 Months

The reason behind this is that to sustain any such move, a large number of active traders are needed (which high volumes correspond to).

Now, here is a chart that shows the trend in the Bitcoin trading volume (7-day average) over the past year:

Looks like the value of the metric has plunged down recently | Source: Arcane Research's The Weekly Update - Week 20, 2022

As you can see in the above graph, the Bitcoin trading volume had sharply jumped up to high values just below $10 billion recently.

These were highs not observed since May of last year. However, the indicator’s value has already plummeted down, clocking just about $4 billion now.

This value is more in line with the normal for the year 2022 so far, but is still a low value historically, as has been the case during the rest of the year.

Related Reading | Bitcoin, Ethereum Exchange Inflows Suggest Sell-Offs Are Far From Over

The report notes that this sharp turn in the trading volume shows how fast the market activity can swing for Bitcoin.

Generally, during periods of low activity, the price of the crypto has tended to run sideways. So, considering the current values, a similar outcome may follow for the coin now as well.

BTC Price

At the time of writing, Bitcoin’s price floats around $29.5k, down 1% in the past week. Over the last month, the crypto has lost 25% in value.

The below chart shows the trend in the price of the coin over the last five days.

It seems like the price of BTC has continued to move sideways over the last few days | Source: BTCUSD on TradingView Featured image from Unsplash.com, charts from TradingView.com, Arcane Research

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Bitcoin Sets Record Streak For Bloodliest Weekly Trend yet

Bitcoin continues to move sideways in the $30,000 area. The general sentiment in the market points to extreme fear levels and uncertainty as to the number one crypto by market cap trades without clear direction.

Related Reading | TA: Bitcoin Price Moves Higher In Range, $30.6K Still Presents Resistance

At the time of writing, BTC’s price trades at $29,500 with a 1% profit in the last 24-hours.

BTC’s price moving sideways on the 4-hour chart. Source: BTCUSD Tradingview

Per a report from Arcane Research, Bitcoin has been making history over the past weeks. The current downtrend could be one of the worst since BTC’s inception as the cryptocurrency recently recorded its first eight consecutive weeks in the red.

The research firm claims BTC’s price established important support at $29,000. This level coincides with 2021’s lowest point during the May-July bearish price action.

Therefore, it should operate as strong support and as an important point to determine any future price action. If this level fails, Bitcoin could retest the $25,000 mark and the $20,000, which stands as the cryptocurrency’s previous all-time high.

Data from Material Indicators and Jarvis Labs provides clues about what is brewing in the market after the recent major move to the downside. During this time, the market usually enters a long consolidation period as liquidity pools below and above BTC’s price are formed.

Jarvis Labs claimed liquidity at $40,000 and $45,000 has been increasing in the past two weeks. Conversely, the liquidity around $28,000 and $25,000 experienced a surge.

Large market participants are usually incentivized to move the price of a cryptocurrency towards those liquidity pools. This suggests a potential retest of BTC’s price current lows and critical support zone to grab liquidity below before the cryptocurrency can move higher. The opposite could be in the cards.

Source: Jarvis Labs via Twitter Who Is Buying The Bitcoin Dip?

Additional data provided by Material Indicators, for low timeframes, indicate important support for BTC’s price at around $29,000. There are $45 million in bid orders around those levels, one of the largest supports in recent months.

As seen below, this suggests the bears might have a difficult time pushing the price of Bitcoin below its current levels.

BTC’s price with support at $29,000 (bid orders below price). Source: Material Indicators

On higher timeframes, the support at $29,000 seems strong. Material Indicators record an increase in buying pressure across several investors.

Investors with small bid orders of around $100 to $1,000 (green and yellow in the chart below) and investors with large orders of around $100,000 have been buying BTC’s current price action.

However, investors with larger orders of over $1 million (brown in the chart below) appear to be selling. This could be contributing to BTC’s consolidation.

Source: Material Indicators

If the whales reduce their selling pressure, maybe BTC could see some relief towards the liquidity pools pointed out by Jarvis Labs. However, market participants should be careful of a potential re-test of $25,000 and $28,000.

Related Reading | Bitcoin Price Could Fall To $8,000, Says Guggenheim CIO

Liquidity around those levels could become more attractive, especially if the price of Bitcoin gets some relief in the short term.

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Bitcoin Rejects Downside At $29k, Here’s Why This Is Good

Today’s Bitcoin price analysis is positive, as a dip to $29,000 was met with solid support and rejection, indicating that additional downside is unlikely. As a result, BTC/USD is expected to rise further in the next days, most likely above the $31,000 resistance level.

Naturally, the psychological price of $30,000 for Bitcoin implies a solid purchase zone. We’ll look at why Bitcoin’s recent consolidation around $30,000 is a promising sign of future price increases.

Bitcoin Fall 57% From ATH

Bitcoin prices have fallen from a high of $69,600 to a current level of $29,350. The entire cryptocurrency market was destroyed by this 57 percent price decrease. As a result of the decreasing prices, a snowball effect began to occur, causing other crypto projects to be hit and sink even more.

The price range of $30,000 for Bitcoin is critical. Many large corporations bought Bitcoins at that price. Furthermore, as shown in Figure 2, Bitcoin prices historically consolidated around those precise positions before beginning an advance.

BTC/USD 1-day chart showing the consolidation area. Source: TradingView

For more than a week, bitcoin has been trading sideways, with the $31,000 mark acting as solid resistance. Meanwhile, significant support has been established at $29,000, signaling a clear consolidation region that must be overcome before the market can continue to develop.

The previous high was set at the same level as the previous low, signaling market hesitation. As a result, the recent $29,000 test could lead to another retest of the resistance.

Related Reading | Eight Consecutive Red Closes: Is Bitcoin Headed For A Recovery?

Will Consolidation occur?

If BTC prices happen to drop below $28,000 again, the next support area would be around $20,000. However, it is more likely that prices will increase from this Bitcoin price consolidation phase. The first target is around $35,000, or a 17% increase in prices. After that, prices should target the next psychological price of $40,000. From there, we might see a slight adjustment lower, but in the long term, prices should break higher. This would mark the official start of the uptrend.

In order for bitcoin’s price to establish a foothold at the bottom in the short term, according to Josh Olszewicz, head of research at investment management Valkyrie, volatility must reduce.

“We can look at things like the 200-week moving average, which is around $22,000. We can look at realized price, which is the average price of coins that have moved on-chain, which is around $23,800,” Olszewicz said on CoinDesk TV’s “First Mover” program. “This [movement to hit bottom] will probably take at least all of Q3, perhaps Q4 as well, if it were to happen this year.”

Other variables, like as the US Federal Reserve boosting interest rates, are also influencing bitcoin’s market performance, according to Olszewicz.

He speculated that institutional investors may be in the forefront of the downturn. The average size of on-chain transactions, according to Olszewicz, is in the tens of thousands of BTC.

Nonetheless, according to Olszewicz, ordinary traders continue to influence market movement more than institutional investors. Those learning about cryptocurrencies are now jumping in during this bear market to “test the waters” and “see if they can survive,” according to him.

Suggested Reading | Ripple (XRP) Plunges To $0.43 With Bears In Full Swing

Featured image from iStock photo, chart from TradingView.com

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Institutional Investors Seek Safe Haven In Crypto Products Amid Market Uncertainty

Institutional investors have been a big part of the crypto market ever since they started investing in the market. Just like every other investors, institutional investors are not immune from the wild price fluctuations that characterizes the crypto market. This has resulted in big money looking for safe havens to move their money into while the worst of the market blows over. Sometimes, they turn to altcoins but this time around seem to have fond better luck with crypto products.

Outflows Rock Market

The recent recovery of the crypto market has been rocked once more by outflows. As prices had recovered, more investors had chosen to take profits and this had lead to more outflows. The previous week saw these outflows from digital investment products grow as high as $141 million in a single week, one of the largest in 2022. This had seen the total assets under management (AuM) decline towards one-year lows, now sitting at $38 billion. The last time AuM was this low had been in July 2021.

Related Reading | LUNA Records 100% Growth In A Single Day. More Upside Coming?

Both Bitcoin and altcoins were not spared the onslaught. For the pioneer cryptocurrency, the inflow trend from the previous week had been swiftly reversed. It instead saw outflows totaling $154 million in a single week, making it the largest loser from last week. In the same vein, Ethereum had also followed in the footsteps of bitcoin with outflows reaching $0.3 million. 

Other altcoins would not follow this trend though. Digital assets such as Cardano and Polkadot have been making their way into the radar of institutional investors and this saw both asset bring in $1 million in inflows respectively. 

Crypto market cap drops to $1.239 trillion | Source: Crypto Total Market Cap on TradingView.com

Blockchain equity investment products would suffer the same fate as Bitcoin and Ethereum and outflows had reached $20 million. This followed the recent trend of broad sell-off in equities that had seen more investors move out of them.

Multi-Crypto Products Provide HavenB

With so much bad news floating around the market, institutional investors have sought refuge in other places besides directly investing in cryptocurrencies. What they have landed on have been the multi-crypto investment products which have emerged the recent winners for last week. 

These multi-crypto investment products saw inflows totaling $9.7 million for last week alone. This has brought the total assets under management to $185 million for multi-crypto investment products, while the total inflows make up 5.3% on a year-to-date basis.

Related Reading | Long Liquidations Continue To Rock Market As Bitcoin Struggles To Settle Above $30,000

It remains one of the best performing when compared to its other counterparts. While others have seen countless weeks of outflows in 2022 so far, there have been only two weeks where multi-crypto investment products had recorded outflows, making it a safer bet for institutional investors during times of market uncertainty.

Nevertheless, year-to-date and month-to-date net flows remain positive for bitcoin. It currently sits at $307 million and $187 million respectively. Although $1.1 million had left the market as a result of outflows from short bitcoin.

Featured image from Moneycentral, chart from TradingView.com

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Investors May Expect Downside For Bitcoin And Ethereum Market For The Next 3 Months

The crypto markets have accepted the depegging of UST and the subsequent downward spiral of LUNA, both of which impacted the price of Bitcoin and the entire digital asset spectrum. According to a recent report by the Glassnode team, the Bitcoin market has been trading lower for eight weeks, making it the ‘longest continuous series of red weekly candles in history.’

Even Ethereum, the most popular altcoin, painted a similar picture. Bearish fluctuations damage returns and profit margins directly or indirectly.

To make matters worse, derivative markets forecast shows more declines in the coming three to six months.

Derivative Markets Hint At More Pain For Bitcoin

According to derivative markets, the prognosis for the next three to six months remains fearful of further fall. On-chain, the report stated that blockspace demand for Ethereum and Bitcoin has dropped to multi-year lows, and the rate of ETH burning via EIP1559 has reached an all-time low.

Glassnode calculated that the demand side will continue to face headwinds due to poor price performance, uncertain derivatives pricing, and extremely low demand for block-space on both Bitcoin and Ethereum.

The report explains:

Looking on-chain, we can see that both Ethereum and Bitcoin blockspace demand has fallen to multi-year lows, and the rate of burning of ETH via EIP1559 is now at an all-time-low.

Coupling poor price performance, fearful derivatives pricing, and exceedingly lacklustre demand for block-space on both Bitcoin and Ethereum, we can deduce that the demand side is likely to continue seeing headwinds.

Both Bitcoin and Ethereum’s price performance over the last 12 months has been disappointing. Long-term CAGR rates for Bitcoin and Ethereum have been impacted as a result of this.

Source: Glassnode

BTC, the largest cryptocurrency, moved in a roughly 4-year bull/bear cycle, which was frequently accompanied with halving events. When looking at long-term returns, the CAGR has dropped from almost 200 percent in 2015 to less than 50 percent as of this writing.

Related Reading | New Data Shows China Still Controls 21% Of The Global Bitcoin Mining Hashrate

Furthermore, Bitcoin had a negative 30% return over the short term, implying that it corrected by 1% every day on average. This negative return for Bitcoin is very similar to prior bear market cycles.

Source: Glassnode

When it comes to ETH, the altcoin performed far worse than BTC. Ethereum’s monthly return profile revealed a depressing picture of -34.9 percent. Ethereum likewise appears to be seeing diminishing rewards in the long run.

Furthermore, during the previous 12 months, the 4-year CAGR for both assets has dropped from 100% to only 36% for BTC. Also, ETH is up 28 percent per year, emphasizing the severity of this bear.

To make matters worse, the derivative market warned of future market declines. Near-term uncertainty and downside risk continue to be priced into options markets, particularly over the next three to six months. In reality, during the market sell-off last week, implied volatility increased significantly.

Total crypto market cap stands at $1.2 Trillion. Source: TradingView

The Glassnode analysis concluded by stating that the present bear market has taken its toll on crypto traders and investors. Furthermore, the Glassnode team emphasized that downturn markets frequently worsen before improving. However, ‘bear markets do have a tendency of ending’ and ‘bear markets author the bull that follows,’ so there is some light at the end of the tunnel.

Related Reading | TA: Bitcoin Price Stuck In Key Range, Why Dips Might Be Limited

Featured image from iStockPhoto, Charts from Glassnode, and TradingView.com

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Bitcoin Price Could Fall To $8,000, Says Guggenheim CIO

Hearing more negative speculation would be unpleasant for the investors as the recent bloodbath’s catastrophic effects already slowed down crypto markets. But unfortunately, an expert predicted Bitcoin would go far below.

Scott Minerd, Chief officer at Guggenheim Partners, a global investment and advisory firm handling $325 billion under its management, speculated that the Bitcoin price could plummet to $8,000. He is the same man who once said in December that “Bitcoin price should be $400,000.”

Related Reading | XRP Has Broken Below Its Long-Standing Support, What’s Next?

The speculation refers to a nearly 70% drop from today’s price of BTC, fluctuating around $30,000.

BTC Could Fall With The Fed Being Restrictive

Speaking with the CNBC’s Andrew Ross Sorkin in an interview held on Monday at World Economic Forum, Switzerland, he said;

When you break below 30,000 [dollars] consistently, 8,000 [dollars] is the ultimate bottom, so I think we have a lot more room to the downside, especially with the Fed being restrictive.

Minerd highlighted the relationship between BTC price and Fed regulation and tightening policies.

Following its previous high of November 10, when BTC’s price marked $69,044, it decreased by around 58% of its value.

“Most of these currencies, they’re not currencies, they’re junk,” he added, saying that “I don’t think we’ve seen the dominant player in crypto yet.”

Comparing the current situation with the dotcom bubble of the early 2000s, he said;

“If we were sitting here in the internet bubble, we would be talking about how Yahoo and America Online were the great winners,” adding that “Everything else, we couldn’t tell you if Amazon or Pets.com was going to be the winner.”

In addition, he urges that digital currency is required to store value. As well as, become a medium of exchange and a unit of account. “I don’t think we have had the right prototype yet for crypto,” said Minerd.

Bitcoin price currently trades at over $29,000. | Source: BTC/USD price chart from TradingView.com Investors Seem Hesitant To Buy Bitcoin Dips

The collapse of stablecoins, including TerraUSD (UST) and its fellow token Luna, has caused the market to suffer a severe blow.

Edward Moya, an analyst from the well-known forex and CFD trading platform of America, OANDA, has commented that Bitcoin prices are steadied even with the broad risk rally on Wall Street. He added;

It looks like most crypto traders are hesitant to buy the dip. Which most likely means that the bottom has not been made.

Moreover, Moya talked about the European Central Bank President Christine, who previously said digital currencies are “worth nothing.”

Related Reading | Solana (SOL) Could Register An Upswing, Thanks To This Pattern

“It is unlikely that any head of a central bank will endorse bitcoin or the other top coins. Especially as we are years away from a digital euro or dollar,” Moya stated. “It looks like bitcoin won’t really attract massive inflows. Until investors believe most major central banks are nearing the end of their tightening cycles.”

He speculated that giant coin prices will possibly remain choppy this summer. 

Featured image from Pixabay and chart from TradingView.com

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How Ethereum’s Uniswap Reached A Milestone Of $1 Trillion In Trading Volume

Popular decentralized exchange (DEX) platform on Ethereum, Uniswap, celebrates a major milestone. Via its official Twitter account, the team behind the protocol announced that it has processed $1 trillion in all-time trading volume.

Related Reading | Coinbase Is on a Downwards Spiral and Could Be Taking your Crypto with It

As seen below, this metric has been on an uptrend since September 2020. At that time, the protocol processed less than $10 billion in cumulative trading volume.

The $1 trillion milestone was reached in less than a year as Uniswap went processing around $250 billion in cumulative trading volume to $750 trillion in March 2022. The metric has been on the rise despite the current downtrend across global markets.

Source: Uniswap Labs via Twitter

The team behind Uniswap stated the following:

It’s been one hell of a ride. As of today, the Uniswap Protocol has passed a lifetime cumulative trading volume of $1 Trillion (…). We couldn’t have reached this milestone without the Uniswap community that continues to build alongside us. Here’s to the next Trillion.

Additional data provided by the team behind the protocol suggest Uniswap’s popularity has been increasing along with its trading volume. The DEX’s market share surpassed 50% in August 2020 and has reached over 60% since that time.

In addition, the number of Uniswap Users recently hit almost 4 million. In January 2021, the metric stood at less than 1 million users. This represents a 4x increase in a little over a year. The inventor of Uniswap, Hayden Adams, added:

$1 trillion all-time volume. I don’t tweet milestones as often these days, but four commas blows my mind. Never expected Uniswap to grow the way that it has. Thanks to everyone who has been along for the ride.

What’s Behind This Ethereum DEX Success?

There are three potential events that have resulted in Uniswap’s increase in market share and popularity. The first in the deployment of its second iteration, Uniswap v2 introduced new features and functionalities replicated across the entire DeFi sector.

The second is the launch of its governance token, UNI. The token rolled out around September 2020, when Uniswap’s fundamental began their upwards ascend, and it was airdropped to all users that ever interacted with the protocol.

The event marked an inflection point in the adoption of DeFi protocols. The next year, the sector boomed with the introduction of non-fungible tokens (NFTs) into the mainstream and more people onboarding it.

Source: Uniswap Labs via Twitter

The third event was the launch of DEX’s third iteration, Uniswap v3. This version offered more rewards to users with active investment strategies.

Today, most blockchain networks can’t exist without a DeFi sector and their own version of Uniswap. Despite its popularity, the DEX and other protocols have been affected by the current downside price action across large cryptocurrencies.

Data from Token Terminal suggests Uniswap peaked in September 2021 when its total value locked (TVL) was close to $10 billion and its trading volume followed. Ever since then, this metric has been in a downtrend and currently appears to be consolidating.

Related Reading | TA: Bitcoin Price Stuck In Key Range, Why Dips Might Be Limited

At the time of writing, UNI’s price stands at $5.57 with a 5.5% loss in the last 24-hours.

UNI trends to the downside on the 4-hour chart. Source: UNIUSDT Tradingview

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