Bitcoin Spot Trading Volume Hit Six-Year Low – Is Investor Confidence Rising?

Opeyemi Sule

1 year ago

3 mins read

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Consistent with the volatile crypto market, the past few months have been filled with uncertainty for Bitcoin (BTC). However, the bears appear to be in control, with the premier cryptocurrency trending toward the $26,000 mark in the past few days.

Despite the struggling Bitcoin price action, investors seem uninterested in taking short-term interests or cutting their losses, with BTC spot trading volumes hitting lows rarely seen in years.

“Macroeconomic Scenario” Responsible For Bitcoin Volume Decline

According to recent research from on-chain analytics provider CryptoQuant, Bitcoin spot trading volume has declined to a six-year low. This latest data, which tracks trading activity on various exchanges, shows the decline BTC volume has experienced in recent weeks.

#Bitcoin spot trading volume drops to 6-year low🚨

"People are more interested in holding their coins, believing in their future value, than selling at the first sign of profit."
by @caueconomy

Link👇https://t.co/2MgO5PJawu

— CryptoQuant.com (@cryptoquant_com) September 26, 2023

CryptoQuant data revealed that the transaction volume of Bitcoin across exchanges roamed between 8,000 and 15,000 daily transactions in the past week. This reflects an abrupt decline from the 600,000 daily transactions recorded in March 2023.

Cauê Oliveira, a contributing analyst at CryptoQuant, attributed the growing fear around the macroeconomic scenario as one of the reasons for this short drop in BTC transaction volume. “The actions of the United States Central Bank perpetuate a constant feeling of uncertainty, leaving investors waiting for a possible recession,” Oliveira added.

Last week, the US Federal Reserve (Fed) opted to keep the interest rates at the current level, ranging between 5.25% and 5.5%. This move aligned with existing economic policy in the United States and market expectations.

Additionally, Oliveira referenced this downward trend in BTC spot volume as an interesting sign of “rising investor confidence.” It demonstrates that Bitcoin investors opt to hold their coins rather than sell them.

Cauê Oliveira added:

Instead of seeking quick profits through short-term trading, more and more people are viewing bitcoin and other cryptocurrencies as a long-term investment. They are more interested in holding their coins, believing in their future value, than selling at the first sign of profit.

According to CoinGecko data, Bitcoin is currently valued at $26,154, with no significant price movement in the past day. BTC maintains its place as the largest cryptocurrency, with a market cap of nearly $510 billion.

Long-Term BTC Holders Continue To Show Faith

A recent on-chain revelation by IntoTheBlock adds more weight to Oliveira’s analysis. The crypto analytics platform disclosed that Bitcoin long-term holders seem unfazed by the current market conditions as they continue to hold their assets.

Despite market turbulence, long-term 'Hodlers' are unfazed. Our latest data reveals a near-record 13.44M BTC held by long-term holders, making up 69% of the circulating supply. Historically, these holders sustain prices in bear markets and take profits in bull runs. pic.twitter.com/99OA9LfUjU

— IntoTheBlock (@intotheblock) September 24, 2023

According to data from IntoTheBlock, the cryptocurrency’s long-term “hodlers” hold 13.44 million BTC, which is merely short of the record of 14.599 million. This amount currently held by long-term “hodlers” accounts for 69% of Bitcoin’s circulating supply.

By IntoTheBlock’s definition, long-term holders refer to investors and entities who bought their coins at least a year ago.

Bitcoin price approach $26,000 on the daily timeframe | Source: BTCUSDT chart on TradingView

Featured image from iStock, chart from TradingView

Opeyemi Sule

Opeyemi is a proficient writer and enthusiast in the exciting and unique cryptocurrency realm. While the digital asset industry was not his first choice, he has remained absolutely drawn since making a foray into the space over two years. Now, Opeyemi takes pride in creating unique pieces unraveling the complexities of blockchain technology and sharing insights on the latest trends in the world of cryptocurrencies.

Opeyemi savors his attraction to the crypto market, which explains why he spends the better parts of his day looking through different price charts. “Looking” is a rather simple way to describe analyzing and interpreting various price patterns and chart formations. However, it appears that is not Opeyemi’s favorite part - in fact, far from it.

Being able to connect what happens on a price chart to on-chain movements and blockchain activities is what keeps Opeyemi ticking. “This emphasizes the intricacies of blockchain technology and the cryptocurrency market,” he would say. Most importantly, Opeyemi thinks of any market insights as the gospel, while recognizing that he is only a messenger.

When he is not clicking away at his keyboard, Opeyemi is most definitely listening to music, playing games, reading a book, or scrolling through X. He likes to think he is not loyal to a particular genre of music, which can be true on many days. However, the fast-rising Afrobeats genre is a staple in Opeyemi’s Spotify Daily Mix.

Meanwhile, Opeyemi is a voracious reader who enjoys a wide category of books - ranging from science fiction, fantasy, and historical, to even romance. He believes that authors like George R. R. Martin and J. K.
Rowling are the greatest of all time when it comes to putting pen to paper. Opeyemi believes his reading of the Harry Potter series twice is proof of that.

Indeed, Opeyemi enjoys spending most of his time within the four walls of his home. However, he also sometimes finds solace in the company of his friends at a bar, a restaurant, or even on a stroll. In essence, Opeyemi’s ambivert (haha! been searching for an opportunity to use the word to describe myself) nature makes him a social chameleon who is able to quickly adapt to different settings.

Opeyemi recognizes the need to constantly develop oneself in order to stay afloat in a competitive and ever-evolving market like crypto. For this reason, he is always in learning mode, ready to pick up the slightest lesson from every situation. Opeyemi is efficient and likes to deliver all that is required of him in time - he believes that “whatever is worth doing at all is worth doing well.” Hence, you will always find him striving to be better.

Ultimately, Opeyemi is a good writer and an even better person who is trying to shed light on an exciting world phenomenon - cryptocurrency. He goes to bed every day with a smile of satisfaction on his face, knowing that he has done his bit of the holy assignment - spreading the crypto gospel to the rest of the world.

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