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While Bitcoin (BTC) continues to trade near its all-time highs (ATHs), trading volume on major exchanges has sharply declined in recent months. This downturn has raised concerns about the sustainability of the current rally.
In a recent CryptoQuant Quicktake post, contributor caueconomy highlighted the significant drop in BTC trading volume across top cryptocurrency exchanges. Notably, trading volumes have reached multi-year lows, reflecting a reduced appetite for trading – particularly among retail investors.
The analyst partly attributed the decline in trading volume to the growing share of spot Bitcoin exchange-traded funds (ETFs) in overall BTC trading activity. According to data from SoSoValue, approximately $132.5 billion worth of BTC is now held by US spot ETFs.
Additionally, caueconomy pointed to waning interest in altcoins as another contributing factor. This trend is evident in the declining Ethereum (ETH)/BTC ratio and the subsequent rise in BTC dominance.
On a more constructive note, the ongoing decline in BTC trading volume does not appear to coincide with a period of market euphoria. This suggests that the current momentum is largely being driven by strategic capital allocators rather than inexperienced speculators.
The analyst concluded that monitoring any spikes in trading volume will be critical, as renewed demand often signals the approach of a local market top. At present, BTC is trading roughly 6.4% below its all-time high.
Amid the current sideways price action, some analysts are still waiting for a definitive directional breakout. For example, renowned analyst Titan of Crypto identified $109,000 as a crucial resistance level. They stated:
BTC needs to break above the last Lagging Span peak to unlock further upside. A rejection wouldn’t invalidate the trend as strong confluence support remains around $100,000. We’re not there yet.
Similarly, crypto analyst Merlijn The Trader noted that BTC is forming a bullish inverted head-and-shoulders pattern on the 3-day chart, with a neckline around $113,000. A breakout above this level could pave the way for a new ATH near $140,000.
While many experts predict BTC to benefit from rising global liquidity – especially the increase in global M2 money supply – others are not as optimistic. Seasoned crypto analyst Ali Martinez recently warned that Tom Demark’s (TD) sequential indicator has flashed a sell signal on the hourly BTC chart.
