Bitcoin Spot Volumes Set Yearly High As BTC Turns Volatile

Bitcoin Spot Volumes Set Yearly High As BTC Turns Volatile

Data shows that Bitcoin spot trading volumes hit a new yearly high last week as the cryptocurrency’s price took a volatile turn.

Bitcoin spot trading volume hit a new high for 2023

According to Arcane Research’s latest weekly report, the 7-day average daily trading volume hit the $13 billion mark recently. “Daily trading volume” is an indicator that measures the total amount of Bitcoin being transacted on 10 Bitwise exchanges.

Bitwise 10 exchanges were chosen for this calculation as these platforms are known for providing the most reliable data in the market. Of course, these are not all exchanges in the industry, but their data still provide a reliable approximation for the trend across the entire spot market.

When the indicator value is high, it means that a large number of currencies are seeing some movement in the spot market right now. Such a trend suggests that traders are currently active.

On the other hand, low values ​​indicate that the BTC market is not seeing much activity at the moment. This type of trend could be a sign that overall interest in the asset is currently low.

Now, here’s a graph that shows the trend in Bitcoin’s 7-day average daily trading volume over the past year:

Bitcoin Trading Volume

Looks like the 7-day average value of the metric has been pretty high in recent days | Source: Arcane Research's Ahead of the Curve - February 21

As shown in the chart above, Bitcoin’s 7-day average daily trading volume has seen a sharp increase over the past week. With this latest burst of market activity, the value of the metric has reached the $13 billion mark, which is the highest seen this year so far.

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From the chart, it is visible that this level of spot volume is also the second highest since February 2022, with only November’s post-FTX panic trading days recording higher values.

The extreme majority of volumes are still concentrated on Binance, however, continuing the trend seen since the removal of the fee on the platform. “Volumes on the other spot exchanges are down from January peaks at $680M as Binance volume still accounts for 95% of daily BTC spot volume,” notes the report.

The reason behind the latest rise in the indicator was the strong price action the cryptocurrency has seen over the past week. Generally, investors are most attracted to markets when they show volatile movements, which is why trading volumes increase during these periods.

Below is a graph that shows how Bitcoin volatility, a metric that measures the deviation of returns from the norm, has changed during recent price action.

Bitcoin volatility

The metric's value seems to have increased recently | Source: Arcane Research's Ahead of the Curve - February 21

After the latest price swings, Bitcoin’s 7-day volatility increased to a value of around 3.9%, which is the highest level the indicator has recorded since November 2022.

BTC price

At the time of writing, Bitcoin is trading around $24,100, up 9% over the last week.

Bitcoin Price Chart

BTC has declined over the last 24 hours | Source: BTCUSD on TradingView

Featured image of André François McKenzie on, charts by, Arcane Research

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