Could Booming Bitcoin Volume Set A Precedent For A Crypto Rally?
Bitcoin Trading Volumes Boom
Over recent weeks, it has become more and more apparent that life has returned to Bitcoin (BTC), and the broader digital asset ecosystem by extension. Independent cryptocurrency researcher Kevin Rooke recently drew attention to data that would corroborate this sentiment on Twitter.
Rooke notes that per statistics from Nic Carter’s CoinMetrics, Bitcoin trading volume on all exchanges combined is up by 150% or so over the last five months, all while BTC fell from $6,000 to $4,000. He adds that the average daily volume sum for the cryptocurrency hasn’t been this high since January 2018, when BTC was falling off its $20,000 peak in a surprising, rapid turn of events.
Bitcoin's daily exchange volume is booming
Volume has increased by ~150% in the last 5 months
Average daily volume hasn't been this high since Jan 2018
Only 9 days in the last 12 months had $10B+ in volume
5 of those days have been in March 2019
pic.twitter.com/0VE9bX9iGQ— Kevin Rooke (@kerooke) March 16, 2019
https://platform.twitter.com/widgets.js
And to put the cherry on top of the proverbial cryptocurrency cake, Rooke adds that while a mere nine days in the last 12 months have posted $10 billion in Bitcoin volume, five of those days have been in the past two weeks.
Could This Set A Positive Precedent For Crypto?
While there are other catalysts that could drive this market, volume readings are seen as a key way to interpret market interest in an asset, meaning that the recent influx of both buying and selling pressure could mean that investors (or traders at the minimum) are starting to see some money-making potential. Many believe that this newfound speculation could fuel a bounce.
Financial Survivalism, for instance, noted that from a top-down perspective, trading volumes are the highest this industry has seen since the last week of 2017, a time when everyone and their dog were investing their savings into altcoins in dreams of striking it rich. The insurance agent turned Bitcoin traders adds that this nascent space hasn’t ever seen “four straight weekly bars with [this] much buying volume,” leading him to the conclusion that a short-term bounce to precede a move to under $2,000 is in Bitcoin’s cards.
But, there’s a nuance or two. Crypto Integrity, a blockchain-centric research division that specializes in market manipulation and fraud, claims that up to 88% of all volume figures could be entirely fraudulent. Integrity’s data science team specifically draws attention to OkEX, Bit-Z, Huobi, HitBTC, among a handful of other mostly unregulated exchanges as perpetrators or accessories in potential wash trading schemes.
Speaking to Decrypt, a team member from the research group explained how it gathered this information:
“[We built] a system that collects low-level market data from exchanges (order books as well as trades). It allows us identify what no one is able to find on charts or by the analysis of trades & volumes.”
If this is accurate, this revelation would be a drastic blow to analysts who believe that cryptocurrencies are slated to move higher on the back of volumes.
Photo by Thought Catalog on Unsplash
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