Would You like a feature Interview?
All Interviews are 100% FREE of Charge
Bitcoin trading volume has collapsed over the past few days. Daily Bitcoin trading volume across major exchanges fell to $14.5 billion on Monday, the lowest level in five weeks, according to data obtained from CoinGecko.th of March.
This is a significant decline after Bitcoin’s daily trading volume surged to $70 billion at the start of the month and is the highest level since the aftermath of the FTX collapse last November.
We are concerned about the decrease in trading volume.
The current $27,000 level could suggest that investors are less willing to buy Bitcoin. US regulatory concerns and fears of a US banking crisis are fading.
This could be a result of a reduction in fiat-to-crypto entry following the collapse of crypto-friendly banks in the US earlier this month (most notably the collapse of Silvergate). is).
Worryingly, the dip in Bitcoin trading volume seen earlier this month plummeted from the mid-$22,000s to sub-$20,000 levels, but was ultimately short-lived.
Bitcoin bulls hope BTC will not experience a similar drop from current levels to the $25,000 key support.
Adding to the bearish concerns is the recently observed weakness in various indicators that measure activity on the Bitcoin network.
CFTC’s Binance lawsuit weighs heavily on volume
The decline in trading volume began before the U.S. Commodity Futures Trading Commission announced a lawsuit against Binance. But lawsuits certainly don’t help things.
If Binance were to be considered an unregistered/unlicensed exchange in the US, major market makers and institutional investors involved in cryptocurrencies would be more cautious about interacting with Binance.
Binance handles the majority of cryptocurrency trading volume. According to data presented by The Block, Binance accounted for 62% of global cryptocurrency trading volume in February, demonstrating a staggering market dominance.
However, its dominance has waned since it abolished commission-free trading of bitcoin pairs.
Recently, a lot has been done within the crypto space of Bitcoin’s so-called 2% market depth drop.
This is the number of buy and sell orders waiting to absorb liquidity on exchanges within 2.0% of the current price.
A 2% decrease in market depth makes it easier for large orders to move the BTC price, making the market more volatile.
Option investors are optimistic about volatility risk
Despite Bitcoin’s continued decline in market depth and the recent sharp drop in trading volume, investors appear to be fairly optimistic about price volatility risk. message.
Deribit’s Bitcoin Volatility Index (DVOL) has slumped from its recent monthly high of 73 and was recently hovering around 62.
This is well above the 50 region’s early March levels, but still well below historical comparisons. Deribit is the leading Bitcoin derivatives exchange.
Bitcoin may have a bumpy move in the short term, but many analysts believe Bitcoin’s long-term prospects remain strong.
READ MORE: Long-Term BTC Price Outlook Still Strong, While Bitcoin Eyes Potential Pullback to Key Support Area