Bitcoin Trading Volume Is Back While The BTC Price Takes A Dump
After having a good start of the year, Bitcoin price has yet again taken a dump. For the most part, BTC price revolved around $4k but yesterday the price went from $4,061 to $3,670. At the time of writing, Bitcoin has been trading at $3,683 with 24-hours loss of about 4 percent.
BTC Price in January, Source: Coinmarketcap
To this, economist and traders, Alex Kruger shared,
“What a majestic dump. $BTC back to my buying area of 3500-3600. Below 3300 exit and reassess. I'd like to see BTC ending the day above 3700. Consolidation below 3600 (bottom of a prior area) would tilt the balance towards further downside.”
He further stated,
“Why IMO 3600 matters. Consolidate below and there's a bull trap above. Simple.”
In tandem with Bitcoin, the entire crypto market crashed resulting in the loss of $17 billion from the overall market capitalization.
Top Cryptos, Source: Coinmarketcap
Trading Volume In Action, What About BTC Price?
However, Bitcoin trading volume is back in the game as it crossed $7 billion at one point. For the last few weeks, the trading volume has been registering approximately $5 billion and is currently at over $6 billion.
Trading volume is of utmost significance that indicates the overall activity of an asset or market for a given period. It is used as a technical indicator by an investor to confirm a trend or trend reversal. The volume gives an idea of the price action of a particular asset and if the asset should be bought or sold.
Generally, the idea is if trading volume increases, prices move in the same direction. However, in case the trading volume and price of an asset has no relationship, in the traditional sense that means a possible trend reversal.
The price just might see some positive action as according to Jeffrey Gundlach, the CEO of DoubleLine Capital and a Wall Street veteran,
“I don’t recommend anything with bitcoin, really … but if you really want to speculate, I think it could make it to $5,000. Talk about an easy 25 percent.”
Mati Greenspan, the senior analyst at eToro also thinks the range is around $5k as he stated earlier this week,
“If we zoom out…we can see that the overall range that we’re in is from $3,000 to $5,000 per coin… So we’re now at the halfway mark in the middle of the broader range.”
Experts to the most part, are still skeptical about Bitcoin holding $3,600 support and expects more pain incoming as the crypto trader, The Crypto Dog says, “I wouldn't short support but I'm not confident in 3600 holding,” while further commenting,
“Not setting heavy bids but I would like to see $BTC at 3400 and $ETH at $115. No reaction there and I think new lows are on the table. Nothing to stress about, all par for the course, cycles matter, long Bitcoin (without leverage) and continue shorting the banks they're rekt.”
Whereas, Vinny Lingham, the CEO and co-founder of CivicKey believes:
“we’re going to retest $3,000 as a low,” and “There is a good chance we’ll probably break through that if it heads that low.”