Daily Bitcoin trading volume has been on the rise since a significant spike in November 2018.
Looking at the data over the last 12 months, the daily volume seems to have broken out of the range it was trading at throughout most of 2018.
The data for this graphic comes from the Crypto Pro app. The app takes volume data from most major crypto spot exchanges, including Coinbase, Kraken, Poloniex, Bitfinex, OKcoin, Bitstamp, Gemini, and Binance.
As you can see in the volume data over the last 12 months, Bitcoin spent the majority of the year trading between $500 million and $1 billion. However, since the November sell-off (where price broke down under $6,000), we have seen a sustained rise in trading activity across spot exchanges.
Since the break upwards, 24-hour trading volume has been consistently above $1 billion a day. The new volume range has also increased, with Bitcoin now trading between $1 billion and $2 billion dollars a day (using information collected on the Crypto Pro app).
When looking at the daily volume profile over the last year, you can see that the profile has a lot of inherent volatility. However, since the uplift in daily volume from November, you can see that the volatility is still happening and maybe even increasing as nominal volume has gone up.
TA from Reddit
After this graphic was posted on Reddit, the user HowLn shared some TA (technical analysis) with the community.
He clarified that “volume can be used as a tool to identify if a price swing is valid or a fake out. The increase of volume we saw in November suggests the down move was genuine.”
He went on to describe the concept of “stopping volume.” This happens when enough volume is present to stop price from sliding further. From his perspective, he thought that in the month of December, the price remained steady due to the increased volume. In his opinion, this “indicates some accumulation.”
HowLn states that his analysis also links to Wycoff’s law of effort vs results.
He concluded that: “The bears put in more effort (volume) but got less results (price spread). This does not mean the bottom is in, but it’s certainly a start.”
I am not sure if what we are currently seeing is a bottom or not for the Bitcoin market. Wycoff accumulation is a theory that can be applied to a variety of data sets that have spurts of parabolic growth/adoption.
But increased ‘active’ interest in people willing to execute across major Bitcoin spot markets has to be a positive long-term trend to celebrate for Bitcoin as an asset class.
Disclaimer: We do not give advice on financial products.