As per the reports by research provider Arcane Research, Bitcoin reached $50,000 levels for the first time in three months. However, its trading volume has still not recovered.
The seven-day average of Bitcoin trading was around $ 5 billion, which is less than half of when Bitcoin was at $50,000 levels in May.
Flattening trading volumes combined with price rise may indicate the market is exhausted, and its prices may not grow in the meantime.
The research report noted that the price hike had not seen a desirable rise in trading volume, which may indicate that it is not yet ready for $ 50,000. Although Bitcoin reached $50,000 earlier this week, at the time of writing, the largest cryptocurrency was trading below $48,000 (25 August 08:10 AM UTC).
In a Telegram conversation with Coindesk, Crypto trading firm QCP Capital wrote:
“Our bullishness comes with some moderation, and we don’t expect more exponential upside breaks like what we saw at the end of 2020 into 2021.”
“Funding rates and future premiums in both BTC and ETH actually continue to be relatively low and muted. This means most of the rally has been driven by demand in physical spot rather than from leveraged speculators.”
Despite the recent price hike, Bitcoin’s blockchain movement remained sluggish and the number of current active addresses was far below the high levels seen during the price hike in early 2021, Glassnode reported on Tuesday. The blog post noted:
“The Bitcoin network is setting around $18.8 billion in daily volume. This is 37% lower than at the 2017 bubble peak, and a whopping 57.6% below the peak set during the May capitulation event.”
However, the fear and greed index saw an “extreme greed” mark this week, indicating that the fear has disappeared amongst traders, and the market is suggesting an optimistic sentiment.