Quant Explains How US Stock Market Volumes Influence Bitcoin Price

Keshav Verma

Last Updated: June 11, 2024 2:26 pm

3 mins read

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A quant has explained how there is a connection between the recent trends in the US stock market volumes and the Bitcoin price.

TradFi Depth Oscillator Has Hit A Low And Is Now Turning Back Up

As explained by an analyst in a CryptoQuant post, the volume depth in traditional finance markets has been low recently.

The “TradFi volume” is a measure of the total amount of transactions that buyers and sellers are making on the US stock market.

There is a concept called “market depth,” which is the ability of any market to take in large orders without impacting the price of the commodity much.

Generally, the more orders there are in a market, or simply, the higher its volume, the stronger the depth of the asset. However, something important is that these orders should be spread evenly within the market, otherwise the depth wouldn’t be as great.

Using an oscillator, the cyclical trend in the depth of any asset can be noticed. Here is a chart that shows how the US stock market volume depth oscillator has changed its values during the last few months:

The value of the metric seems to have been turning around in recent days | Source: CryptoQuant

As you can see in the above graph, the quant has marked the relevant zones of trend between the Bitcoin price and the TradFi volume depth oscillator.

It looks like whenever the indicator has transitioned from positive to negative values, the value of the crypto has observed bearish winds.

On the other hand, the metric crossing the zero line the opposite way has lead to a bullish trend for the price of BTC.

Bitcoin has also seen local bottom formations around the points where the stock market volume depth oscillator itself has hit lows.

About a week ago, the indicator hit very low values that were comparable to those between February and March 2020. Since then, the metric has started turning back up.

The analyst believes that this recent trend formation could imply that Bitcoin may see a respite soon, and bounce to levels between $21.5k to $24.5k.

Bitcoin Price

At the time of writing, Bitcoin’s price floats around $19.2k, up 2% in the last seven days. Over the past month, the crypto has lost 4% in value.

The below chart shows the trend in the price of the coin over the last five days.

Looks like the value of the crypto has been stuck in consolidation during the past few days | Source: BTCUSD on TradingView

Featured image from Traxer on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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