Earlier this year, when the price of BTC fell by more than 60% from the former record high, also a less noted number of bitcoin collapsed: the bitcoin trading volume.
There are many explanations for the decline in the BTC trade – from mining to blockchain competition or simply that the year of release of the blockchain is so long ago. But it is unclear why the level has not recovered, as the price of BTC has risen by 50% since February 5.
The average number of BTC trades registered daily has roughly halved from the December highs and reached its lowest level in two years last month, even as bitcoin became a household name and also rose above $10,000 again after the year of this turbulence thanks to more demanding mining.
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Statistics: What does trading volume per day mean?
The trading volume statistics show the number of shares or contracts that indicate the total activity of a security or market for a certain period of time. It is an important technical indicator with which an investor confirms a trend or a trend reversal and can be monitored by tracking. Volume gives investors an idea of the price development of a security and whether they should buy or sell the security.
Blockchain Tracking: Why is the BTC volume important for investors?
The trading volume can help a BTC investor to recognize the momentum of a stock and confirm a trend. If the volume increases, prices will generally move in the same direction depending on the payment methods used. This means that if a security remains higher in an upward trend, the volume of the security should also increase and vice versa.
This is where the analysis of the trading volume comes into its own. The investor sees a steady increase in volume in the past month. He also recognizes that it is the company with the highest volume and the share is still on an upward trend. This signals to the investor that the company is gaining momentum and that the trend should continue to rise.
Trading volume as a sales indicator
Trading volume can also indicate when an investor should make a profit and sell a security due to low activity. If there is no correlation between the trading volume and the price of a security, this signals a weakness of the current trend and a possible reversal.
What the BTC volume tells you:
Whenever you refer to the “price” of Bitcoin, you refer to the price of the last trade on a particular exchange. This important distinction is made because statistics show that there is not a single global price that everyone follows. Sometimes the price of Bitcoin in other countries may differ from the price of BTC in Germany, as the most important stock exchange in these countries includes different transactions.
Besides the price you sometimes also see the terms high and low. These terms refer to the highest and lowest prices of the last 24 hours – the trading volume per day. Another important term is volume. It represents the total number of coins traded in the specified period. Significant trends are generally accompanied by large trading volumes, while weak trends are accompanied by low volumes.