Bitcoin and other cryptocurrencies experienced a slight boost on Friday, but the overall market remained stagnant, with trading volumes hitting their lowest levels in years. This lack of activity is a worrisome indication of a lack of wider interest in the crypto space, which could ultimately impact prices.
In the past 24 hours, the price of Bitcoin has increased by 1.6% to reach $26,100. This puts it back above the $26,000 threshold that has been its trading range for much of the last month. However, the spike to $28,000 last week following a positive court ruling for crypto was short-lived, with prices quickly falling back to the $25,000 zone.
Rachel Lin, CEO of trading platform SynFutures, believes that we are currently in a period of lateral trading with a bearish undertone. The market is eagerly awaiting a significant event that will trigger a decisive move. In the meantime, we should expect the horizontal trend to persist.
Unfortunately, Bitcoin lacks the excitement seen in the stock market with the Dow Jones Industrial Average and S&P 500. It has hit its lowest volatility levels in recent months, which is discouraging for traders. In fact, spot Bitcoin trading volumes in August reached their lowest levels since March 2019 when Bitcoin was valued at around $4,000.
Sacha Ghebali, a director at digital asset information group The Tie, comments on the current situation, stating that there is very little trading activity taking place. Retail demand appears to be low, as evidenced by the data showing low volumes on exchanges.
The decline in trading volumes is concerning for Bitcoin, as it has historically relied on retail investors’ high interest due to its volatility. With volumes so low, it suggests a lack of market dynamics, with prices showing minimal movement even in response to significant macroeconomic and crypto-related catalysts.
Turning to other cryptocurrencies, Ether, the second-largest crypto, saw a minor increase of less than 1% to reach $1,640. Smaller cryptos, known as altcoins, had mixed results, with Cardano experiencing a slight increase of less than 1% while Polygon slipped by 3%. Memecoins like Dogecoin and Shiba Inu also saw a slight decline.
While Bitcoin and cryptocurrencies remain in a stagnant state, it remains to be seen what could potentially trigger a significant shift in the market. As trading volumes dwindle and retail demand stays low, the future of the crypto space hangs in the balance.