Bitcoin Exchange Activity Slumps As Retail Stays On Sidelines – Will Bulls Lose Momentum?

Source Bitcoinist

While Bitcoin (BTC) continues to trade near its all-time highs (ATHs), trading volume on major exchanges has sharply declined in recent months. This downturn has raised concerns about the sustainability of the current rally.

Bitcoin Trading Volume On Exchanges Slumps

In a recent CryptoQuant Quicktake post, contributor caueconomy highlighted the significant drop in BTC trading volume across top cryptocurrency exchanges. Notably, trading volumes have reached multi-year lows, reflecting a reduced appetite for trading – particularly among retail investors.

CQ1

The analyst partly attributed the decline in trading volume to the growing share of spot Bitcoin exchange-traded funds (ETFs) in overall BTC trading activity. According to data from SoSoValue, approximately $132.5 billion worth of BTC is now held by US spot ETFs.

Additionally, caueconomy pointed to waning interest in altcoins as another contributing factor. This trend is evident in the declining Ethereum (ETH)/BTC ratio and the subsequent rise in BTC dominance.

ethbtc

On a more constructive note, the ongoing decline in BTC trading volume does not appear to coincide with a period of market euphoria. This suggests that the current momentum is largely being driven by strategic capital allocators rather than inexperienced speculators.

The analyst concluded that monitoring any spikes in trading volume will be critical, as renewed demand often signals the approach of a local market top. At present, BTC is trading roughly 6.4% below its all-time high.

Amid the current sideways price action, some analysts are still waiting for a definitive directional breakout. For example, renowned analyst Titan of Crypto identified $109,000 as a crucial resistance level. They stated:

BTC needs to break above the last Lagging Span peak to unlock further upside. A rejection wouldn’t invalidate the trend as strong confluence support remains around $100,000. We’re not there yet.

titan

Similarly, crypto analyst Merlijn The Trader noted that BTC is forming a bullish inverted head-and-shoulders pattern on the 3-day chart, with a neckline around $113,000. A breakout above this level could pave the way for a new ATH near $140,000.

merlijn

Some Warning Signs For BTC

While many experts predict BTC to benefit from rising global liquidity – especially the increase in global M2 money supply – others are not as optimistic. Seasoned crypto analyst Ali Martinez recently warned that Tom Demark’s (TD) sequential indicator has flashed a sell signal on the hourly BTC chart.

Further, Binance open interest recently recorded a divergence from BTC price, signalling caution. The Bitcoin RCV indicator has also moved out of the “buy” zone, raising fears of a price pullback. At press time, BTC trades at $104,292, down 3% in the past 24 hours.

bitcoin
Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Ethereum Price Forecast: ETH bounces off $4,100 as whales show resilienceEthereum (ETH) saw a 5% gain on Wednesday as large-scale holders continued accumulating the altcoin despite increased profit-taking from retailers.
Author  FXStreet
Yesterday 01: 40
Ethereum (ETH) saw a 5% gain on Wednesday as large-scale holders continued accumulating the altcoin despite increased profit-taking from retailers.
placeholder
USD/JPY extends its recovery to 147.60 amid generalised Yen weakness The US Dollar accelerated its recovery against a weaker Japanese Yen on Friday.
Author  FXStreet
22 hours ago
The US Dollar accelerated its recovery against a weaker Japanese Yen on Friday.
placeholder
Bitcoin Price Forecast: BTC steadies at $113,500 as traders await Powell’s Jackson Hole speechBitcoin (BTC) steadies around $113,500 at the time of writing on Thursday after falling 3% so far this week.
Author  FXStreet
22 hours ago
Bitcoin (BTC) steadies around $113,500 at the time of writing on Thursday after falling 3% so far this week.
placeholder
Ripple Price Forecast: XRP slips as investors lock in $300M profit ahead of Fed Chair Powell's speechXRP fell 3% to $2.85 on Thursday as investors booked over $300 million in profits following hawkish Federal Open Market Committee (FOMC) minutes from its July meeting.
Author  FXStreet
6 hours ago
XRP fell 3% to $2.85 on Thursday as investors booked over $300 million in profits following hawkish Federal Open Market Committee (FOMC) minutes from its July meeting.
placeholder
Ethereum Price Forecast: ETH risks selloff as supply in profit tops 90% ahead of Powell's speechEthereum's (ETH) large percentage of supply in profit could stir selling activity as hawkish signs continue to grow on Thursday, ahead of Federal Reserve (Fed) Chair Jerome Powell's speech at Jackson Hole.
Author  FXStreet
6 hours ago
Ethereum's (ETH) large percentage of supply in profit could stir selling activity as hawkish signs continue to grow on Thursday, ahead of Federal Reserve (Fed) Chair Jerome Powell's speech at Jackson Hole.
goTop
quote