Bitcoin (BTC) price analysis: Low bitcoin volume is worrisome, approaching year low

Trading volume is one of the top metrics that reflects the health of the market. And judging by the waning bitcoin volume, we might be in trouble.

Trading volume of the bellwether cryptocoin is on a downward trajectory in the last 24hrs, falling from $5 billion to only $3.8 billion according to the data from CoinMarketCap. It looks even wearier if we look at the same metric on ShapeShift’s where the volume dropped below $3 billion, to a paltry $2.54 billion.

For traders, volume hints at sustainability of a given asset. A drastic price increase with low volume might be fool’s gold. A drop with considerable volume behind it might mean a coin is in for an extended bear run. There are no certainties in cryptocurrency. But effectively assessing volume is an important tool in an investor’s belt.

Bitcoin – Time to show strength

So long we have this meager trading volumes, bulls are nowhere to be seen. Buying the dip makes sense only when there is enough trading volume and liquidity which promises a potential short-term rally.

There was a short-lived increase last week when bitcoin reached $6,700, but most of the traders ascribed that to the Tether FUD and run-off. After that episode ended, bitcoin deflated back to the $6,400 level.

Several traders came out with differing opinions, including a technical analyst known as CryptoYoda, who pointed out that the dominance index of BTC suggests an influx of capital into tokens is imminent.

“BTC Dominance indicating top might have been reached. In previous cases, similar structures led to strong selloffs, meaning capital flowing out of btc into alts. Both context and altitude in favor of a move down. Close below 50% would confirm altseason.”

Where do we go from here

BTCUSD  is approaching our first support at 6456.0 (horizontal swing low support, 100% Fibonacci extension , 78.6% Fibonacci retracement ) and a strong bounce might occur above this level pushing price up to our major resistance at 7242.6 (horizontal swing high resistance, 61.8% Fibonacci extension , 76.4% Fibonacci retracement ).

Stochastic (34,5,3) is also approaching support and we might see a corresponding rise in price should it bounce off this level.

Trading CFDs on margin carries high risk.

Losses can exceed the initial investment so please ensure you fully understand the risks. 


Overall, market sentiment is still positive for the mid to long-term developments of the whole sector. This is additionally validated by the positive news such as launch of Fidelity crypto trading platform, Bakkt opening its doors in December or yesterday’s breaking news of new investments from Goldman Sachs into cryptocurrency wallet provider BitGo

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Sarah Wurfel
Sarah Wurfel

Sarah Wurfel works as a social media editor for CaptainAltcoin and specializes in the production of videos and video reports. She studied media and communication informatics. Sarah has been a big fan of the revolutionary potential of crypto currencies for years and accordingly also concentrated on the areas of IT security and cryptography in her studies.

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