According to data provided by Glassnode, Bitcoin’s trading volume has hit a one-month low, which could be because the year-long rally is potentially over.
Bitcoin’s market performance
The main reason for the decrease in trading efficiency can be mostly attributed to the negative performance of the asset in the market. Bitcoin has lost 27% of its value since last month. At its lowest point in December, Bitcoin was trading with a 38% loss in value. According to some analysts, the trend in the cryptocurrency market seems unlikely to change for the foreseeable future, but long-term market conditions support the rise.
📉 #Bitcoin $BTC Transaction Volume (7d MA) just reached a 1-month low of $8,299,465,422.01
View metric:https://t.co/rngyRZtyyM pic.twitter.com/8ewDJRPVjn
— glassnode alerts (@glassnodealerts) December 11, 2021
Bitcoin also recently dipped below the 140-day trendline, which served as a support for the uptrend that started in July.
New epidemic risk
With the increasing number of lockdowns around the world, financial risks have increased drastically, which could affect Bitcoin’s price performance.
In addition, traditional financial markets and assets are currently facing slight price rebounds, which may indicate that investors are exaggerating the current risks in the market.
Transaction activity on-chain is also declining as more retail traders leave the financial markets. It is worth noting that traditional financial markets also reported large volume drops at the end of the year.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.