Volatility Ahead For Bitcoin Price as Global Trade Volumes Drop Sharply

The global cryptocurrency trade volume took a sharp dip on Saturday evening, falling by half a billion in just five hours. The fall from $10.5 billion to $10 billion pushes the global total closer to yearly lows, and could be a sign that volatility is just around the corner – be it for good or bad.

Falling Trade Volumes

The decline in trade volumes hadn’t made itself felt in the global market cap at the time of writing, as Bitcoin and the majority of altcoins continue to trade sideways.

But for how much longer? Every time global volumes have dipped to the $9 billion mark in the last few months, it has been accompanied by either a tremendous market surge, or terrible market dip.

When a market loses trade volume, it becomes very easy to manipulate. This can be seen most easily among various altcoins in the lower ends of the market cap rankings every day.

As for Bitcoin, its own trade volumes dropped from $3.7 billion to $3.4 billion. The last time any real volatility hit BTC was when trade volumes dropped below the $3 billion mark. That applies to Monday’s Tether-induced spike; it applies to the 40% spike seen in July of this year, and it also applies to the 15% flash dip that struck in mid June.

BTC/USD

In the previous twenty-four period leading up to Saturday evening, BTC continued to trade in a remarkably tight range. Opening the day at $6,400 and closing the same twenty-four period at $6,400 has been the case for almost a month and a half now.

The occasional rise to $6,700 and dip to $6,200 means BTC has traded within a $500 range for the last fifty or so days, and marks one of the least volatile periods in Bitcoin’s history.

The same can be said for most of the major altcoins, except those which had major breakouts based on promising news and developments. As of Saturday evening (UTC), every coin the market cap top twenty except two recorded less than a 1% swing either way for the day.

Only Zcash (ZEC), which is hotly anticipating the enactment of its upcoming Sapling hardfork, and IOTA (MIOTA) – which is making headlines for its supposedly imminent move into Venezuela, have recorded clear gains of any kind.

As it stands, BTC appears to have found a fairly reliable level near the $6,000 range – which it hasn’t fallen below since October of 2017, almost a year ago exactly. At the current price, BTC could afford to take another 5% flash dip and still be holding strong near $6,000, although the subsequent hit on the altcoin market would be more severe.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

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Greg Thomson is a freelance writer who contributes to leading cryptocurrency and blockchain publications like CCN, Hacked, and others.

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