Bitcoin’s average monthly price has appreciated by almost 80 percent since March’s Black Thursday crash. But as per the latest data from CoinGecko, spot trading volumes have gone down by 28 percent quarter on quarter. Are BTC investors holding more than trading?
CoinGecko shared Part 1 of its Q2 2020 quarterly crypto market report. The crypto market data platform posted highlights from the report in a series of tweets.
One of them pointed out the stark contradiction in trends pertaining to Bitcoin price movement and spot trading volume activity.
CoinGecko said:
5/ Bitcoin’s average monthly price is now up 78% from the March bottom. However, Bitcoin’s average total spot trading volume is depicting a downward trend which is down by 20% quarter-on-quarter.
That’s not all. In its report, the crypto data aggregator website also noted that the cryptocurrency market cap surged by 44.5 percent in Q2. Contrastingly, crypto spot trading volumes declined by a humongous 55 percent.
Usually, market cap and spot volumes share a healthy correlation. But the trend seems to have shifted this year.
According to the report, three reasons can be attributed to this uncharacteristic market behavior:
While CoinGecko assumed the possibility of increased Bitcoin HODLing behavior amongst investors, CEO of on-chain analysis firm, Glassnode confirmed this fact a few days back.
As reported by CryptoPotato yesterday, Bitcoin’s realized cap hit a new high of $107 billion. This affirms increased long-term investor confidence in the market. But what about the price?
According to the reputed crypto trader and analyst, Josh Rager, there are visible signs of compression on the Bitcoin chart, that point to increased price volatility in the upcoming weeks.
He also said that there is a very bleak possibility of Bitcoin rising above the $10K mark and crashing again. Drawing similarities with the current trend, Rager commented that Bitcoin breaking past $10,000 will energize bullish buyers who will try and sustain the trend by whatever means possible.