Bitcoin Trading Volume Reaches Six-Year Low Amid Macroeconomic Uncertainty

Amid a backdrop of macroeconomic uncertainty, trading volumes for Bitcoin (BTC) exchanges have experienced a notable decline. Recent research from the on-chain analytics platform CryptoQuant revealed that daily BTC volumes have plummeted to levels not observed since 2018, particularly over the past few months.

The analysis indicated that daily BTC spot exchange transactions fluctuated between 8,000 and 15,000 in the last week, starkly contrasting with the average daily volume of over 600,000 in March. This downturn in trading activity coincides with Bitcoin’s price movement remaining relatively stable within a narrow range for several months.

Caue Oliveira, an analyst at CryptoQuant, linked the decrease in trading volumes to the prevailing macroeconomic conditions. He noted that the United States Central Bank’s actions have fostered a pervasive sense of uncertainty, prompting investors to consider the potential for a recession. Throughout 2023, the Federal Reserve’s inconsistent approach to interest rate adjustments has further contributed to this uncertainty.

Despite the drop in trading activity, Bitcoin holders seem to be adopting a more long-term perspective on their investments. Rather than engaging in short-term trading for quick profits, a growing number of investors are choosing to hold onto Bitcoin and other cryptocurrencies as part of a long-term strategy. Oliveira observed that these holders are focused on the potential future value of their assets instead of selling at early signs of profit.

Supporting this trend, data from IntoTheBlock on September 24 revealed that long-term Bitcoin holders continue to retain their assets, regardless of market fluctuations. According to the platform’s definition, long-term holders are those who have held their coins for at least a year. Currently, these long-term investors hold 13.44 million BTC, constituting 69% of Bitcoin’s circulating supply.

The decline in trading volumes and the inclination towards long-term holding coincide with Bitcoin’s price approaching the $26,000 mark. Notably, short-term holders are facing unrealized losses, as their cost basis exceeds the current spot price.

As a result of these developments, interest in Bitcoin has diminished. Data from Google Trends indicates that the search term “Bitcoin” has seen its lowest interest levels since October 2020, suggesting that external curiosity about BTC remains subdued amid ongoing economic uncertainty and challenging market conditions.