Trading volatility has been shrinking for a while now as a result of recent capitulation in the crypto market, which appeared to have made the value of Bitcoin to depreciate by the day. Recording a daily low of $8400, Bitcoin is struggling around the $8500 at the moment. Meanwhile, the market scenario is causing a FUD – Fear Uncertainty and Doubt amongst holders. Furthermore, the recent drop in Bitcoin’s price was led by panic selling in the market which is likely to continue if Bitcoin continues to fall.
Compared to the previous days of trading, Bitcoin’s volume has seriously subdued to around $21.5 billion at the moment. More so, the entire crypto market cap is now trading under $153.2 billion. Apart from today, Bitcoin’s trading volume has been quite minimal in percentage.
According to a crypto derivatives market analysis, SKEW, Bitcoin options volumes reached a daily high of $60.1 million on Deribit Exchange a few hours ago with a minimum volume of $2.0 million, maximum of $69.3 and an average of $28.6.
Could this be a sign of an incoming bull rally for Bitcoin?
Well, we will get to know that in the next couple of days. However, the current selling pressure is still setting a serious panic in the entire crypto space, although Bitcoin may give light if we start to see a substantial increase in the trading volume
If we look at Bitcoin’s trading volumes across major Bitcoin options Exchanges such as Binance, Bitmex, Kucoin, Cex.io, amongst others, we would observe that the volumes are quite low as traders and investors stay on hold as Bitcoin’s next move is uncertain.
In my own opinion, selling BTC at the moment could be a nice spot for short-traders as the current price drops may become heavy in the next couple of days. At the same time, traders might want to maintain a neutral position for now in order to wait for a good and perfect entry.
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Michael Fasogbon is a professional Forex trader and cryptocurrency technical analyst with over five years of trading experience. Years back, he became passionate about blockchain technology and cryptocurrency through his sister and has since been following the market wave.