Spot Bitcoin trading volumes experienced a significant drop after reaching their peak levels last month, which were last seen after the FTX cryptocurrency exchange collapse in November. This decline can be attributed to the considerable volatility and lack of trading fees on BTC pairs on Binance during that time.
Based on the information retrieved from CoinGecko’s API, the trading volumes of Bitcoin in various significant exchanges amounted to approximately $16.4 billion on Friday.
Last month, the spot volumes were nearly $70 billion.
The weakening of spot volumes is not the only concern as per the latest data presented by The Block, the trading volume of Bitcoin futures has reached only $350 billion so far in April. However, it is noteworthy that the trading volume of Bitcoin futures was around $1.3 trillion in March.
Could the weakening trading volumes be a potential threat to the bullish market thesis?
It is possible that some may perceive a decline in trading activity as a sign of reduced interest in Bitcoin.
Although past instances of high trading volume have often coincided with price increases, such as with Bitcoin earlier this year, the correlation between volume and price is not particularly strong. This is evidenced by the fact that Bitcoin has continued to rise in value recently even as trading volumes have decreased. In fact, Bitcoin recently surpassed $31,000 for the first time in months, with gains of around 7% for the month, despite the fact that trading volume has dropped significantly compared to March.
At present, an increase in trading volume would be appreciated, as long as it is caused by a surge in demand for Bitcoin. However, even without such a spike, the BTC value can still rise due to several significant factors working in its favor. This is because Bitcoin currently enjoys several crucial advantages.
