Bitcoin Trading Volume Remain High, Will BTC Price Bounce Back?

Bitcoin
Bitcoin

Bitcoin Trading Volume Remain High, Will BTC Price Bounce Back?

Bitcoin is hovering precariously just above the $7,400-500mark, a psychological support level and a technical edge of a “deep cliff”. The question racing through investors’ and traders’ minds is whether BTC will overcome the strong bear momentum witnessed in November, or bounce back in a trend resumption reflecting gains of late October. As it is, there is some room to wriggle. Bulls and bears are clashing, but buyers seem to have an advantage judging from increasing trading volumes.

Bitcoin BTC
Bitcoin Trading Volumes

Bitcoin Trading Volumes Remain High

There are several reasons why technical analysts are optimistic and expecting Bitcoin to recover. Even though Bitcoin is down double digits week-to-date, losing 12.7%, technical indicators are pro-bulls. Reason? Trading volumes.

Bitcoin-BTC
Bitcoin Price

As a decentralized asset that is also the most valuable, the coin has utility, a fact that the US SEC admits. Over time, BTC has evolved to be a reliable store of value, an alternative to gold, and a medium of exchange. Lightning Network proves that Bitcoin, despite the limiting transaction fees, can be used for micro-payments, a positive development that is overly bullish.

Across the board adoption, development of complex derivative products and increasing awareness contribute positively to BTC transaction volumes, a positive indicator revealing the strength of the base and how most people are currently holding their BTC stash.

Divergence with Price

The divergence between price and trading volumes is good news for HODLers. From an effort versus result perspective, dropping prices present an opportunity for aggressive traders to capitalize, enter long positions and wait for BTC to edge higher as long as prices are steady above $7,400, the main support line.

Bitcoin BTC
Bitcoin Price Chart

All this is because of the bears’ inability to wipe out gains of Oct 25-27 with the same velocity witnessed in late October. Note that gains made from Oct 25-27 took over three weeks to reverse. Besides, accompanying these losses were markedly low trading volumes, which did not eclipse the average posted on Oct 25-27.

Technically, those are bullish signs, and strong indicators that BTC could bounce back in a contrarian move, setting the pace ahead of the highly anticipated May 2020 halving.

Summary
Bitcoin (BTC) Analysis: Price and Volumes Diverging Bullish
Article Name
Bitcoin (BTC) Analysis: Price and Volumes Diverging Bullish
Description
Bitcoin is hovering precariously just above the $7,400-500mark, a psychological support level and a technical edge of a “deep cliff”.
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Author: Dalmas Ngetich

Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich

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Dalmas Ngetich 60 Articles

Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich

Follow Dalmas @