The average trading volume of Bitcoin, the largest cryptocurrency in the world, has reached new heights, a first since April last year.
Kevin Rooke, an independent researcher in crypto data, alerted the community to the volume of Bitcoin in his tweet on Saturday. Rooke revealed how in March, traders exchanged approximately $10 billion. Last November, these numbers plummeted to $6.25 billion at their lowest. This was the month in which the cryptocurrency’s price dropped by 35% thanks to the Bitcoin Hard Fork debacle.
Through the Crash
Retrospectively, the drop in the market in early 2018 wiped off traders as well as valuations. After the crash, fewer investors entered the cryptocurrency market, Bitcoin included. There were, therefore, visible lower trading volumes in June and October last year. During this time, Bitcoin still managed to remain at a stable level around $6000, although the price did form lower highs on every bounce-back. In November, Bitcoin managed to break through the $6000 and established new support of almost $3100 last December.
This downside action of prices put off potential investors. The trading volume remained pretty stable between last November and January, showing a weak presence of traders in the markets. In February, however, this increased to nearly $7 billion. March showed an even more impressive recovery than February.
“Bitcoin’s daily exchange volume is booming,” said Rooke. "Volume has increased [approximately]150 percent in the last five months. Average daily volume hasn't been this high since January 2018. Only nine days in the last [twelve]months had $10 billion-plus in volume – five of those days have been in March 2019."
Reigniting the Presence of Investors
Volumes don’t explicitly indicated a bullish or bearish bias in the market. They behave as an indicator to show the presence of investors. Despite long-term optimistic possibilities, Bitcoin has not been traded much. The crash in 2018 certainly didn’t help. Negative reports in the media, as well as the dismissive views of some global economist leaders, did not support the revival either throughout the majority of the year. This resulted in a lower volume than previously.
Since last December, Bitcoin has fought its way back into the bullish zone. It recovered over 18% since the bottom formation of $3100. The increase in the trading volume each day happened at the same time, which is an exciting occurrence. This showed that more investors entered the market when the recovery signs appeared at the start of 2019. This then led to a surge in volume throughout the two months that followed.
Despite this, the exchanges still receive condemnation for supposedly inflating trading volumes falsely. The Blockchain Transparency Institute explained that the reported size of Bitcoin on CoinMarketCap was 99% false.
"Over 80% of the CMC top 25 BTC pairs volume is a wash traded," it wrote. "These exchanges continue to use these strategies as a business model to steal money from aspiring token projects."
Should this be true, there could be a massive challenge for the bulls to prove the long-term bullish outlook for Bitcoin.