Bitcoin Trading Volumes Have Collapsed in The Past Few Days 

On July 31, Bitcoin refused to budge from its solid position in spite of movement materializing in the financial ecosystem. U.S. stocks closed on Monday, with all three major indexes ending with gains for the month. Last month, Nasdaq refiled an application with the SEC to list an ETF by BlackRock that will reflect the price of Bitcoin. According to data from Cointelegraph Markets Pro and TRadingView, nothing has had an immediately discernible nor sustained (a trend change) effect on Bitcoin’s value, experiencing a short period of price increase. More exactly, Bitcoin was trading below $29,000. At the time of writing, Bitcoin is trading at $29,185.22.

The monthly close could open the door for some volatility, which could shake the cryptocurrency world. The budding drop in Bitcoin’s price has alarmed traders and investors, as it can potentially produce higher losses. An increase in supply on exchanges may lead to a higher inclination among holders to sell Bitcoin, which could impact its market valuation. Many investors and traders want to buy Bitcoin, but few are willing to part with them. The disinterested cryptocurrency markets are patiently waiting for the upcoming developments in the traditional markets.

Is Bitcoin Heading for A Bull Run?

Market analysts believe that Bitcoin is getting ready for a seasonal surge. It’s expected to rally towards $42,000. Material Indicators point out that the cryptocurrency market needs to print candles above the 10-week moving average for a bull market breakout to be taken into consideration – if the close is above the 200-day moving average, it’s a bull market. A bull market is when the conditions are favorable, meaning that the price of Bitcoin remains elevated over a prolonged period of time. At the Bitcoin 2022 conference in Miami, a bull statue made its debut, highlighting a changing of the guard in global finance.

At times, it’s necessary to hit the bottom to rise higher than before. A bear market is always followed by a bull market, so those who invest now will be rewarded. Thriving in a bull market is a matter of sticking to the principles, not making predictions about Bitcoin. At least, that’s what the experts say. It’s a good idea to buy into the bull market, sell to realize profits, and reinvest at a higher price point. One way to minimize the risks during a cryptocurrency bull market is to enter the market bit by bit. The reason for this is that Bitcoin’s price can fall immediately, so the losses can be counteracted by earlier buys.

Bitcoin Trading Volumes Are at Their Lowest in Over Two Years

The trading volume on cryptocurrency exchanges in the past months was the lowest recorded in over two years, according to pseudo-anonymous trader Mikybull Crypto. A volatile outcome is expected, which will skyrocket Bitcoin to a different level. Various cryptocurrency market participants are expecting a volatile BTC/USD, making it more difficult to trade profitably. The Bitcoin price tends to have an inverse relationship with the realized volatility of the U.S. stock indices. Bitcoin’s price fluctuates and is affected by supply and demand, investor and user sentiments, government regulations, and media hype. A link has been discovered between Bitcoin volatility and search pressure on Bitcoin-related words, such as “Bitcoin.”

The trading volume is an important metric for determining the strength and potential of a cryptocurrency. Simply put, it helps establish liquidity and the overall health of the market, so getting a better understanding of the trading volume is important for traders and HODLers alike. Attention must be paid to the fact that the trading volume only accounts for public transactions and doesn’t include over-the-counter transactions. In other words, it doesn’t provide a complete picture of the trading activities in the cryptocurrency market. Bitcoin is inherently volatile because it’s still immature, and its adoption path is insecure.

Will The Upcoming Halving Escalate the Price of Bitcoin?

Every four years or so, the reward for Bitcoin mining is cut in half. Bitcoin is propagated by miners whose hardware completes complex calculations to verify transactions so they’re correctly included in the blockchain, essentially a public digital ledger. A halving, also referred to as a halvening, takes place every 210,000 blocks to slow down the pace at which new Bitcoins are created. This reduces inflationary pressure on Bitcoin. Bitcoin can’t undergo dilution by means of inflation, which is why it’s so appealing to investors and traders. According to the founding protocol, only 21 million Bitcoins will ever be in circulation. Bitcoin mining fees will disappear when that limit is reached.

The next Bitcoin halving is anticipated to arrive in 2024 – the exact date can’t be forecasted, but the experts think that it will be around May 4, 2024. The mining reward (block reward) will be reduced to 3.125 Bitcoins. All 21 million Bitcoins will have been mined by 2140, meaning that roughly 98% will have been mined by 2030. Traditionally, Bitcoin halvings have been associated with increases in the value of Bitcoin in the months to follow. Nevertheless, as the mining rewards continue to be reduced, it’s highly unlikely the next Bitcoin halving will result in any significant price change or that miners will leave the network.

Final Thoughts

If the trading volume decreases and liquidity is low, Bitcoin may experience a drop in value. Such a collapse would determine other cryptocurrencies to fall as well, as Bitcoin is the largest cryptocurrency by market capitalization. A greater volume of Bitcoin being traded leads to fairer prices and reduces price distortion, while a lower trading volume can be associated with a lack of market interest, so the asking price of sellers fails to meet the expectations of prospective bidders. What’s certain is that the cryptocurrency community is looking forward to seeing if Bitcoin can achieve its ambitious targets and reach new record highs.

As long as Bitcoin holders keep their tokens in non-custodial wallets, there’s no reason to worry about alternative Bitcoin products like ETFs on Wall Street. Financial institutions don’t manipulate the books or inflate the supplies. Despite the ongoing decline in Bitcoin’s market depth, investors and traders remain optimistic regarding volatility risks.