- Investor’s honeymoon with Bitcoin (BTC) seems to be ending. After rallying slightly last week, prices have now started falling.
- Over 10% of Bitcoin’s value was wiped away yesterday, with other major coins like Ethereum (ETH) and Ripple (XRP) experiencing similar losses.
- Despite that, the crypto market has experienced a sharp rise in trading volume.
- The increase in the volume suggests that the overall interest in the top-ranking cryptocurrency is rising.
Last week, the top ten cryptocurrencies were mostly in the green after a modest recovery. However, following BTC’s recent surge to around $4100, the flagship cryptocurrency was unable to gain enough upward momentum to propel its value higher. It has now fallen below the critical psychological level of $4000. The crash has led the whole crypto market down, with major altcoins like Ripple (XRP) and Ethereum (ETH) trading over 9% down.
At press time, Bitcoin is trading down 7.9% at its current price of $3,837, according to data from CoinMarketCap. The currency’s upward push stalled when its price touched $4,100, which has proven to be a strong resistance level.
Trading volume surges
As Bitcoin’s price keeps falling, crypto trading volume took a surge from $23 billion to $35 billion by Sunday. At press time, the total volume is around $38 billion. It is the highest level for this year. The increase in the total trading volume might suggest that the overall interest in digital currencies is increasing.
It could also mean there are more coins available for sale than there are willing buyers at the current price.
Emotions can drive crypto markets as well. Fear sometimes sets in when investors see a price drop. They might try to sell their coins for fear that the price will drop lower, pushing selling volumes higher.
Along with market cap and circulating supply, the volume is one of the most important metrics in cryptocurrency. Trade volume is the number of tokens that have been traded in the last 24 hours. It shows how many people are buying and selling the asset.