Is Bitcoin’s daily transaction volume hitting a new ATH of $ 29 billion, signaling an upward trend?

Researcher Kevin Rooke Note that the daily transaction volume in the Bitcoin network reached a new all-time high (ATH) of 29 billion US dollars on Sunday (September 26th).

He also pointed out that just 5 days in Bitcoin’s history have processed over $ 20 billion, 3 of which occurred during that week.

Bitcoin transaction volume | Source: Twitter

But what does that mean in the current market landscape?

Bitcoin is about to explode?

Lately, a variety of factors have increased selling pressures in both the stock and crypto markets. Most notably, China’s real estate giant Evergrande has seen its $ 300 billion liquidity crisis.

Last week, Chinese regulators also stepped up efforts to crack down on all crypto transactions, including mining.

Bitcoin hit a local low of $ 39,700 on September 21, 25% less than the local high of $ 52,800. It has since traded in a tight range with $ 45,100 marked high.

However, today’s Bitcoin price has climbed above the $ 40,750 support and a break above $ 43,633 clearly shows that the bulls are poised to establish an uptrend.

Bitcoin price chart | Source: Tradingview

Typically, technical analysts view rising prices along with volume as confirmation of the trend. But do we see that with Rooke’s data?

“If the price volatility is accompanied by a high volume, it can be said that the price movement is trending upwards. Conversely, if a price movement is accompanied by a low volume, this may indicate a weakness in the underlying trend. “

A distinction must be made between volume and trading volume.

Volume refers to any transaction between a buyer and a seller. A transaction occurs when a buyer agrees to buy what a seller is offering. If there are five trades on a day, the volume for that day will be five.

The above trading volume is a situation that takes into account the price of the asset at the time of the transaction.

Therefore, according to Rooke data, the volume that ATH reaches cannot be considered a trend confirmation as this metric includes frequently changing prices.

Additionally, the use of recent trading volumes to compare past activity is somewhat inaccurate as the average price for 2021 is much higher than previous years at $ 46,800. Hence, any form of comparison with times when Bitcoin was undervalued is lame.

Looking at actual volume, not trading volume, the past ten days have seen a downtrend as the price failed to retest the $ 44,900 resistance.

Rising prices with reduced volumes indicate a weak uptrend and a possible bearish reversal.

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Mr. Teacher

According to Cryptoslate

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