Spot Bitcoin Trading Volumes Remain Weak – A Threat to the BTC Bull Market Thesis?
After hitting their highest levels last month since the aftermath of the FTX cryptocurrency exchange collapse last November thanks to significant volatility and zero trading fees on BTC pairs on Binance, spot Bitcoin trading volumes have fallen significantly.
According to data pulled from CoinGecko’s API, spot Bitcoin trading volumes across major exchanges were around $16.4 billion on Friday.
That compares to close to $70 billion this time last month.
And it's not just spot volumes that have weakened recently.
According to data presented by crypto analytics website The Block, mid-way through April, Bitcoin futures trading volume have only reached around $350 billion month-to-date.
For the full month of March, Bitcoin futures trading volumes were around $1.3 trillion.
Options trading volumes are also tracking for a weaker month, according to another chart presented by The Block.
Some might interpret weaker trading volumes as indicative of softening demand for Bitcoin.
While it's true that past major trading volume spikes have coincided with price spikes, such as for Bitcoin in the first half of 2021, the relationship between higher volumes and higher prices is weak.
That’s borne out by the fact that Bitcoin has been able to continue advancing to the upside in recent weeks, despite trading volumes fading.
Indeed, the BTC price rose above $31,000 for the first time since last June on Friday, taking its gains for the month to around 7.0% - a month that has seen volumes drop off substantially versus March.
For now, while a trading volume spike would be welcome (if driven by an influx on new demand for Bitcoin), the BTC price may well be able to continue pushing higher.
That’s because Bitcoin has a lot of very important tailwinds right
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