Bitcoin Volume on Most Exchanges Plunges, Binance Hits ATH
Data shows that the Bitcoin volume dominance of Binance has reached a new all-time high as activity on other exchanges has fallen recently.
Binance accounts for 95% of Bitcoin volume among Bitwise 10 exchanges
According to the latest weekly report from Arcane Research, trading volume excluding Binance has fallen 42% over the past week. “Daily Trade Volume” is an indicator that measures the total amount of Bitcoin being transacted on the Bitwise 10 exchanges on a given day.
While the indicator only accounts for volumes on the Bitwise 10 exchanges, which are certainly not all the exchanges found in the sector, the trend on these exchanges is still a reliable approximation of the true trend of the entire market.
When the value of the daily trading volume is high, it means that the spot market is seeing a large number of coins being moved around right now. Such a trend suggests that traders are currently active in the cryptocurrency.
On the other hand, low values suggest that trading activity among investors is currently low on spot exchanges. This type of trend can be a sign that there is not too much interest in the asset at the moment.
Now, here’s a chart showing the trend in 7-day average Bitcoin trading volume over the past year:
The value of the metric for Binance seems to have been quite high in recent days | Source: Arcane Research's Ahead of the Curve - February 7
In the graph above, the trading volume data on Binance and that on the other exchanges are shown separately. The reason behind that is since Binance removed trading fees on BTC pairs last year, the volume on the platform has exploded, which is partly due to wash trading on the exchange that has been made viable due to the zero fee policy.
From the chart, it is clear that the 7-day average trading volume on both Binance and the rest of the Bitwise 10 exchanges has decreased recently, but the decline has been much more dramatic on the latter platforms.
Total trading volume including Binance has dropped 7% in the past week, while excluding the exchange, the drop has been a whopping 42%. Arcane Research mentions that the volume on Coinbase reached its lowest value since October 2020 just a few days ago.
The likely explanation behind the market activity falling this week is that the price of the cryptocurrency has largely consolidated sideways around the $23,000 mark. Investors usually find such price action unexciting, so they tend not to make too many trades during periods like this.
Due to plunging volumes in the other Bitwise 10 exchanges, Binance’s share of the total trading volume among them has risen to 95%, a new all-time high.
BTC price
At the time of writing, Bitcoin is trading around $23,100, up 1% in the past week.
BTC continues to consolidate | Source: BTCUSD on TradingView
Featured image from Thought Catalog on Unsplash.com, Charts from TradingView.com, Arcane Research
