On-chain analytics firm Santiment has revealed how the two largest spikes in trading volume coincided with recent buying and selling windows for Bitcoin.
When the value of this metric is high, it means the traders are making a large number of moves on the market. Such a trend suggests interest in the asset is high. On the other hand, the indicator having a low value implies investors may not be paying much attention to the cryptocurrency as they are participating in a low amount of activity.
Now, here is a chart that shows the trend in the trading volume for Bitcoin and other top coins in the sector over the last few months:
“Note that the two largest volume spikes from Bitcoin signaled the optimal time to buy (as prices were falling) and sell (as prices peaked to a new ATH),” explains the analytics firm.
Where the emerging volatility may lead the asset is hard to say based on the trading volume data alone, as it doesn’t separate between buying and selling moves. Spikes that come near price lows, however, can be signs of buying. This is what happened in April. Similarly, a particularly sharp uptick in activity after rallies, like the one seen earlier in the month, can be a sign of profit-taking.
At present, Bitcoin trading volume remains elevated, but its current value of $66 billion is clearly still a step below the levels seen during the aforementioned turnarounds.
Bitcoin has been facing sustained bearish momentum recently as its price has gradually been sliding down, with its latest value coming at $113,000.
