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Low Volume Usually Precedes Violent Moves in Bitcoin

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The main source of profit for crypto exchanges is the fee they charge to clients who exchange on their platforms.

At the point when exchange volumes are low, crypto exchanges struggle to make profits and currently volumes are very low.

Adding to that, the drop in the bitcoin price, which has shaken the market causing fear and a bearish sentiment with everybody on Twitter calling for $6,000, the crypto economy seems to be perfectly set up for an ideal perfect bullish tempest.

The real trading volume in the last 24 hours according to data from the Messari is $186 million compared to near $4 billion a few months ago. This means that bitcoin trading volume is 20 times smaller than the peak days.

Trading volume on derivative markets like Bitmex or peer to peer markets like Localbitcoins has a similar pattern, a decline in trading volume. CME volume makes an exclusion here because trading volume there has a trend to the upside.

Also, the transactions on the blockchain are under the $800 million daily in terms of dollars, but still the number of transactions remains steady at 320,000 transactions per day.

It is worth to mention that bitcoin had a notable bull run this year going to $14,000 in July and maybe it is time to cool down for a period of time before the next move. And this is probably what the trading volume points to.

On the other side, we have Bakkt volume which was a total disappointment for the crypto community. Bakkt offers future contracts settled in bitcoin which compared to the CME Future contracts settled in cash was expected to be mega bullish for bitcoin.

However, it seems that institutions play the game in another way. Institutions don’t FOMO, instead, they try to suppress the price on future markets settled in cash while accumulation steadily physical bitcoin on spot or OTC or whatever exchanges that offer physical bitcoin.

What are your thoughts about the bitcoin trading volume and what do you think these low volume signals?

Feel free to post your opinion in the comments below.

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Ethan Hunt

Bitcoin Maximalist and Toxic to our banking and monetary system. Separation of money and state is necessary just like the separation of religion and state in the past.

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