Bitcoin Trading Volume Spikes, Altcoin Interest Stays Low
On-chain data shows that Bitcoin trading volume has been increasing, while interest around altcoins has remained low recently.
Bitcoin trading volume recently crossed the $30 billion mark
According to data from on-chain analytics firm Holy, altcoins are now attracting lower and lower interest rates as BTC’s price dominance strengthens. “Trading volume” is an indicator that measures the total daily amount of a cryptocurrency (in USD) being transacted on the blockchain.
When the value of this metric is high, it means that a large number of tokens of the asset in question are currently being moved on the network. Such a trend suggests that traders are active in the market these days.
On the other hand, low indicator values suggest that the cryptocurrency is not seeing much activity on the blockchain at the moment. This could be a sign that general interest in the asset is low among investors.
Now, here’s a chart showing the trend in trading volume for the top 10 cryptocurrencies by market capitalization (excluding stablecoins) over the last few months:
Looks like the value of the metric has been quite high in recent days | Source: Santiment on Twitter
As displayed in the chart above, Bitcoin’s trading volume has increased sharply recently as the cryptocurrency’s price has seen quite high volatility.
This type of trend is nothing out of the ordinary as high bursts of volatility can draw a lot of attention to the asset as investors often find these events interesting. New traders are naturally attracted to the blockchain during these periods, and old traders also react to the price action by repositioning themselves.
As the latest high volatility event was quite violent, the trading volume levels touched during it were significantly higher than those seen last month. At its recent peak, the indicator crossed the $30 billion mark, the highest since March 22, 2023.
From the chart, it is visible that Ethereum’s trading volume also increased during this period, but the increase was not as significant as what Bitcoin saw.
Altcoin trading volume overall has remained at fairly low levels despite recent volatility, suggesting investors are focusing primarily on BTC at the moment.
The reason behind this low altcoin interest is likely to be the fact that the BTC price has shown strength recently as it has outperformed all coins on this list during the last seven days.
The volatility experienced by the #1 cryptocurrency was also higher overall than altcoins experienced, further explaining why holders may be paying more attention to it.
BTC price
At the time of writing, Bitcoin is trading around $29,200, up 4% over the last week.
BTC has displayed high volatility in the last few days | Source: BTCUSD on TradingView
Kanchanara featured image from Unsplash.com, charts from TradingView.com, Santiment.net