Bitcoin has had something of a shaky start in 2020, but the currency has managed to remain above the ,000 line, which is always a good thing.Bitcoin Trading Volume Isn’t High EnoughAccording to one source, however, cryptocurrency enthusiasts and analysts are focusing too much on the movement of the price and not enough on the daily doings that occur behind closed doors. It points out that bitcoin volumes are as low as they were in April of last year, which could lead to an increase in volatility.The data comes from Arcane Research, which states that bitcoin daily trading volume is down by nearly 90 percent from its June 2019 high, and when volume is low like this, the market is more likely to take a few hits along the way.Arcane explains in a statement:The seven-day average real trading
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Bitcoin has had something of a shaky start in 2020, but the currency has managed to remain above the $7,000 line, which is always a good thing.
Bitcoin Trading Volume Isn’t High Enough
According to one source, however, cryptocurrency enthusiasts and analysts are focusing too much on the movement of the price and not enough on the daily doings that occur behind closed doors. It points out that bitcoin volumes are as low as they were in April of last year, which could lead to an increase in volatility.
The data comes from Arcane Research, which states that bitcoin daily trading volume is down by nearly 90 percent from its June 2019 high, and when volume is low like this, the market is more likely to take a few hits along the way.
Arcane explains in a statement:
The seven-day average real trading volume continued downwards this week. The first day of the year registered as little as $192 million in volume. These levels have not been seen since April 2019. Although this could be related to the holiday period and less activity during the weekends, this is not a positive trend for the leading cryptocurrency in the space.
The problem hasn’t ended here. According to Arcane Research, the daily bitcoin trading volume has continued to fall and is on the verge of being as low as it was in early 2019 – when the currency was trading for around $3,500. Analysts warn that if this does not improve, we could see heavy drops hitting the crypto space.
This leads us to wonder if perhaps the recent bitcoin spike may be something of a fluke, inspired simply by a tense geopolitical environment. Once these tensions relax, will the price of bitcoin take a serious nosedive?
Right now, bitcoin is incurring small but steady spikes of roughly $100 or more. At the time of writing, it’s trading for just over $7,400 – about $500 more than where it was two days ago.
However, if people aren’t interested in bitcoin anymore or if people aren’t trading, it doesn’t matter what kind of environment the currency faces. Without people entering the space, trades cannot happen, and if trades don’t happen, the currency is likely to suffer and fall.
Too Much Tension
One of the other problems with bitcoin’s price is that there is a certain level of fear spreading through the industry given that the recent strike against Iran – which is widely being “blamed” for bitcoin’s sudden surge – could potentially lead to additional problems for both that country and the United States, which engaged in the strike. Many are concerned about potential tension between both areas, which could lead to further conflict.
If the currency is lacking positive energy, are these price spikes likely to end before they can truly pick up momentum?