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2022 Kicks-Off With A Big Drop In Bitcoin Trading Volume

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2022 Kicks-Off With A Big Drop In Bitcoin Trading Volume

The year 2022 has started for Bitcoin with a huge decline in the crypto’s spot trading volume. The current seven-day average value of the metric is the lowest it has been in more than five months.

Bitcoin Trading Volume Observes A Drop With The Ending Of 2021

As per the latest weekly report from Arcane Research, the year 2021 has ended with a plunge in the BTC trading volume.

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

When the value of the metric rises, it means trading activity on the BTC chain is going up as more investors move their coins.

High values of the trading volume have usually been ideal for sustaining any big movements of the price. In the past, there have been several occasions where Bitcoin tried to make a jump, but chain activity didn’t light up in tandem. Such moves have generally failed before long.

On the other hand, when the indicator’s value goes down, it implies there isn’t much trading activity currently going on in the network. This may show that investors aren’t very interested in moving their coins at the moment.

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Now, here is a chart that highlights the trend in the BTC trading volume over the past year:

2022 Kicks-Off With A Big Drop In Bitcoin Trading Volume

Looks like the value of the indicator has trended down recently | Source: The Arcane Research Weekly Update – Week 52

As you can see in the above graph, the Bitcoin trading volume had a huge spike at the start of December that accompanied a crash in the price of the crypto.

Since then, however, the indicator’s value has been steadily going down, and it now floats around lows not seen since more than five months ago.

Related Reading | What To Expect For Bitcoin, NFTs, Blockchain, And Crypto At CES 2022

Due to this low volume, BTC has mostly been in consolidation this past month. As long as the trading activity doesn’t spike up, it’s unlikely that the crypto will be able to make any sharp moves.

BTC Price

At the time of writing, Bitcoin’s price floats around $46.7k, down 2% in the last seven days. Over the past month, the crypto has lost 5% in value.

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

2022 Kicks-Off With A Big Drop In Bitcoin Trading Volume

BTC’s price has continued to struggle in the last few days | Source: BTCUSD on TradingView

Bitcoin has started the year 2022 consolidating between the $45k to $50k range. At the moment, it’s unclear when the coin may be able to break out of this sideways movement, and if the trading volume is anything to go by, it could take a while longer.

Featured image from Unsplash.com, charts from TradingView.com, Arcane Research

2022 Kicks-Off With A Big Drop In Bitcoin Trading Volume

Source

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