Consistent with the volatile crypto market, the past few months have been filled with uncertainty for Bitcoin (BTC). However, the bears appear to be in control, with the premier cryptocurrency trending toward the $26,000 mark in the past few days.
Despite the struggling Bitcoin price action, investors seem uninterested in taking short-term interests or cutting their losses, with BTC spot trading volumes hitting lows rarely seen in years.
“Macroeconomic Scenario” Responsible For Bitcoin Volume Decline
According to recent research from on-chain analytics provider CryptoQuant, Bitcoin spot trading volume has declined to a six-year low. This latest data, which tracks trading activity on various exchanges, shows the decline BTC volume has experienced in recent weeks.
#Bitcoin spot trading volume drops to 6-year low
“People are more interested in holding their coins, believing in their future value, than selling at the first sign of profit.”
by @caueconomyLinkhttps://t.co/2MgO5PJawu
— CryptoQuant.com (@cryptoquant_com) September 26, 2023
CryptoQuant data revealed that the transaction volume of Bitcoin across exchanges roamed between 8,000 and 15,000 daily transactions in the past week. This reflects an abrupt decline from the 600,000 daily transactions recorded in March 2023.
Cauê Oliveira, a contributing analyst at CryptoQuant, attributed the growing fear around the macroeconomic scenario as one of the reasons for this short drop in BTC transaction volume. “The actions of the United States Central Bank perpetuate a constant feeling of uncertainty, leaving investors waiting for a possible recession,” Oliveira added.
Last week, the US Federal Reserve (Fed) opted to keep the interest rates at the current level, ranging between 5.25% and 5.5%. This move aligned with existing economic policy in the United States and market expectations.
Additionally, Oliveira referenced this downward trend in BTC spot volume as an interesting sign of “rising investor confidence.” It demonstrates that Bitcoin investors opt to hold their coins rather than sell them.
Cauê Oliveira added:
Instead of seeking quick profits through short-term trading, more and more people are viewing bitcoin and other cryptocurrencies as a long-term investment. They are more interested in holding their coins, believing in their future value, than selling at the first sign of profit.
According to CoinGecko data, Bitcoin is currently valued at $26,154, with no significant price movement in the past day. BTC maintains its place as the largest cryptocurrency, with a market cap of nearly $510 billion.
Long-Term BTC Holders Continue To Show Faith
A recent on-chain revelation by IntoTheBlock adds more weight to Oliveira’s analysis. The crypto analytics platform disclosed that Bitcoin long-term holders seem unfazed by the current market conditions as they continue to hold their assets.
Despite market turbulence, long-term ‘Hodlers’ are unfazed. Our latest data reveals a near-record 13.44M BTC held by long-term holders, making up 69% of the circulating supply. Historically, these holders sustain prices in bear markets and take profits in bull runs. pic.twitter.com/99OA9LfUjU
— IntoTheBlock (@intotheblock) September 24, 2023
According to data from IntoTheBlock, the cryptocurrency’s long-term “hodlers” hold 13.44 million BTC, which is merely short of the record of 14.599 million. This amount currently held by long-term “hodlers” accounts for 69% of Bitcoin’s circulating supply.
By IntoTheBlock’s definition, long-term holders refer to investors and entities who bought their coins at least a year ago.
Bitcoin price approach $26,000 on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
Credit: Source link
