Low Bitcoin Market Activity Triggers ‘Caution’ Alert for Traders

The 7-day average trading volumes for bitcoin have dropped to their lowest level in two and a half years alongside a muted derivatives market


Wit Olszewski/Shutterstock, modified by Blockworks


It’s no secret that bitcoin (BTC) and the broader digital asset market have been in a relatively quiet consolidation for some time.

The unusual inactivity is most notably reflected in 7-day average trading volumes, which have dropped to their lowest level in two and a half years, K33 said in a research note on Tuesday.

However, the reintroduction of trading fees by Binance slightly skews the overview. When analyzing trading volumes excluding Binance, the 7-day average spot volumes in the first quarter of this year have occasionally been lower.

Bitcoin, the industry’s bellwether, dipped to two-week lows in the early hours of Wednesday ET. BTC is down about 2.1% over a 24-hour period to $26,200, Blockworks Research data shows.

Source: TradingView, Bitcoinity *Includes Bitwise 10 Exchanges

The absence of significant price movement recently has driven BTC’s 30-day volatility down to 1.69%, according to K33. This also marks the lowest 30-day volatility for the asset since Jan. 11, immediately preceding BTC’s surge from $16,000 to $17,000.

“While it’s challenging to pinpoint exact volatility catalysts ahead, apart from the debt ceiling deadline, traders should be cautious with selling volatility as conditions reign unnaturally calm,” K33 said.

Crypto derivatives are also struggling for signs of life. Perpetual volumes for the blue-chip digital asset have been downward over the last month, hitting a 2.5-month low on May 20, with BTC volatility remaining lackluster.

There is a silver lining for those eyeing potential upside in the mid-to-long term.

Analyzing bitcoin from a broader view using the Net Unrealized Profit/Loss, investors, on average, are currently holding onto unrealized profits amounting to 23.5% of their investments

This trend is often witnessed during the early stages of a bitcoin bull market, suggesting crypto could be experiencing the onset of a bullish trend, data research firm CryptoQuant said in its weekly report.

CryptoQuant highlighted the recent accomplishment of attaining 1 million active addresses this month, subsequent to a recent upswing, as a strong indication of bitcoin’s resilient performance.

That may provide some comfort to those holding onto the asset as it indicates a healthy level of activity and engagement in the market, CryptoQuant said.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg


Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.


Safe has teamed up with Web3Auth to create tooling for building Ethereum applications on top of smart accounts


Wildcat wants to make undercollateralized lending terms completely transparent


On-chain protocols represent “the next stage of the software revolution,” partner at the Denmark-based company says


A defendant sued the SEC after the agency took him to trial in its own court system — now it’s up to the Supreme Court to decide that system’s constitutionality


In a call with reporters Monday, division chief Jim Lee said that crypto-related tax evasion cases are mounting


The new protocol introduces a non-custodial and permissionless ether liquid staking solution, mETH