Indeed, Bitcoin’s trading volume on crypto exchange Coinbase has hit an eight-year high representing the highest volume ever, data shared by investment research platform Game of Trades on November 15 indicates.
Implication of Bitcoin’s soaring volume
Notably, the spiking volume can be interpreted in different ways, considering Bitcoin’s price continues to be dominated by the bears. For instance, the metric can be viewed as a bear trap characterized by coordinated and controlled selling likely to create a temporary plunge in Bitcoin’s price. Indeed, Bitcoin price has recently attempted to mount a rally after plunging following the FTX cryptocurrency exchange crisis. In some cases, with increased Bitcoin volatility, short-term traders can get lured to make multiple trades as they attempt to time the markets, hence a possible spike in trading volume. Historically, incidents of trading volume surging to the highest levels usually signal capitulation, which results in potential price bottom. Furthermore, in recent months, Bitcoin trading volume has surged in the wake of tumbling global fiat currencies against the United States dollar. Investors appeared to turn to Bitcoin as they sought to dump their fiat currencies in favor of the asset, which was viewed as a hedge alongside a source of profit from arbitrage.
Bears remain dominant
In the meantime, Bitcoin’s price continues to be at the mercy of bears and bulls as the asset has failed to make a formidable move in either direction. By press time, Bitcoin was trading at $16,700, representing losses of less than 0.5% in the last 24 hours. Notably, as reported by Fibold, Kitco News analyst Jim Wyckoff suggested that despite bulls attempting to stabilise Bitcoin’s price, bears have a technical advantage. Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
