Bitcoin trading volume has been declining until now in June 2020. If it continues to break supports, there would be the possibility of changing the price of the cryptocurrency.
The price of Bitcoin started the third week of June dropping below USD 9,000, reaching its third-lowest low of the month. In the early hours of Monday, June 15th, Bitcoin fell to 8,990.18 to then rebound to 9,150.48 at the time of writing this article.
The main cryptocurrency has experienced great difficulties to establish itself above USD 10,000 in 2020. After reaching USD 10,375 on February 13th, it fell to its lowest low of the year at USD 4,121 after the World’s Health Organization (WHO) officially declared that the COVID-19 outbreak was a pandemic last March. The only times the price of Bitcoin has managed to exceed USD 10,000 was in May before the halving and on June 1st, only to drop as sharply as it had risen. It is possible to see this through the well-known graphic pattern called “Bart Simpson”. It received that name for its resemblance to the hair of the animated character.
Between March and June 2nd, the price of Bitcoin had shown a clear upward trend, reaching ever higher lows, breaking resistances, and establishing price support at increasingly high levels. However, since the day that the “Bart Simpson” pattern was observed, Bitcoin has broken several lower levels of support, establishing lower lows and lower highs.
The charts also show a decline in volume averages in the cryptocurrency markets. At first, people may think that the cause for the decrease in the trading volume on exchanges could be the withdrawal of Bitcoin to transfer it to personal wallets, which suggests an accumulation phase more in the medium or long term.
If the demand for Bitcoin increased on exchanges, the lack of liquidity could lead to a further rise in prices. However, the current decline in the trading volume suggests that, at least in the short term, the bullish momentum of the parent cryptocurrency may be losing strength.
It would be necessary to wait as Bitcoin tests its immediate support level and establishes firmly above USD 9,000 or if it continues to drop to lower lows. The objective of said wait is to confirm whether it is a momentary reversal of the price direction or a mere take on profits to enter long positions again. However, resistance at USD 10,000 remains firmly established.
The largest trading volume of the first cryptocurrency in recent days is on Binance with the BTC/USDT pair, having traded an estimated USD 586,395,906. It is followed by the same pair on OKEx and Huobi, with trading volumes of USD 523 million and USD 413 million, respectively.
Since its creation, Bitcoin has suffered major declines from which it has managed to rise to recover and exceed its highs. Despite the decline in its trading volumes in recent days, the cryptocurrency is still an excellent investment option.
By Alexander Salazar