Bitcoin boredom takes derivatives trading volume to one-year low
Bitcoin for the past couple of weeks has been in a perpetual flat state. As expected, this has spilled into the market across all spheres, with all bitcoin and its related products feeling the heat. The futures markets were not left out as volume had started to decline. By last weekend, volumes on bitcoin futures had fallen so much that they had hit a new annual low.
A bad time for everyone
Bitcoin futures volume had picked up tremendously in the bull market of 2021. However, as the crypto winter rolled around, volumes had started to fall. There were points where recoveries were recorded, but not enough to guarantee a significant and continued increase in volumes.
This past weekend, market momentum was particularly low. It swung both ways as both inflows and outflows were not recorded in ETFs like BITO. As a result, bitcoin futures volume had fallen to its lowest point in the past year.
The same was the case across the perpetual switches for the weekend time frame. The decline in activity led to the lowest volumes in a one-year period. The market remained completely flat and funding rates continued to trend in neutral territory.
BTC futures volume reach one-year lows | Source: Arcane Research
This decline in trading volume across these key spheres of the bitcoin market appeared to have set a tone of low momentum for the digital asset heading into the new week. But as another weekend rolls around, bitcoin has proven its ability to deviate from even the most obvious trends.
Bitcoin bounces back after pause
The Bitcoin rebound recorded in the middle of the week has been nothing short of phenomenal. After trending just above $19,000 and struggling to maintain its value, the cryptocurrency had been able to mount a recovery that pushed it back towards the $21,000 level.
BTC recovers to mid-$20,000s | Source: BTCUSD on TradingView.com
What this shows is a complete deviation from the expected price movements for the digital asset. It also means there will be a pullback from futures and perpetual swap volumes, as well as trading volumes across the market.
After the price surge, bitcoin had already marked an increase of over 130% in trading volume in a 24-hour period. As the market heads into another weekend, expectations have been reoriented and a weekend of high volatility is now expected for the crypto market.
Bitcoin has now built support at $20,500 over the weekend. Institutional investors’ interests are expected to revive during this period, which is likely to see ETFs like BITO register better volumes compared to the previous weekend.
Featured image from Bitcoin Magazine, charts from Arcane Research and TradingView.com
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