A clear divergence between prices and trading volumes on the charts suggests bitcoin’s (BTC) recent $800 rally could be short-lived.
Prices are currently up more than 9 percent from recent lows near $7,500 on June 6. Notably, BTC revived the short-term bullish outlook with a move above $8,100 on Wednesday. The follow-through has been positive, as well.
Yes, as trading volumes haven’t picked along with the price rise, the breakout lacks substance.
For instance, bitcoin’s 24-hour trading volume across all cryptocurrency exchanges currently stands at $19 billion – down 42 percent from the high of $33 billion seen on May 16, according to CoinMarketCap.
More importantly, daily trading volume has averaged roughly $18 billion throughout the recent recovery from $7,500 to $8,300, which is significantly lower than the sell volume of $24 billion and $29 billion seen on May 30 and June 4.
While the wider market is reported to be rife with inflated volumes, the numbers from major exchanges included in the calculation of Bitwise's “real” bitcoin trading volume also show the recent price rise is not backed by big volumes.