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Bitcoin (BTC), after rebounding from its local low of $75,000 around April this year, appears stuck between $100,000 and $110,000, with little sign of any clear trend. Bitcoin’s volume is one key indicator of this lack of direction.
Bitcoin Network volume stuck in balance zone
According to a recent CryptoQuant Quicktake post by contributor AxelAdlerJr, Bitcoin’s network volume has stabilized in a state of ‘stable equilibrium,’ reminiscent of the mid-2021 consolidation phase that preceded a major move.
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The Bitcoin network volume, for the non-initiated is the total amount of BTC that has been transferred over the blockchain in a given period. It’s typically used to measure market activity and the flow of capital. A higher network volume indicates increased liquidity and investor interest, while a lower volume could indicate waning interest or stagnation in the market.
Notably, when BTC reached the upper end of its current range – around $110,000 – its average network volume surged to as high as $67 billion. The metric is now slightly lower and hovers at $58.7billion.
Bitcoin’s network average volume ranges between $40 billion to $80 billion since January 2024. The CryptoQuant analyst believes that this corridor is a good indicator of the market’s sentiment and network activity.
In the past, the Bitcoin price peaked at $70,00 and $100 when the average Bitcoin volume reached the upper end. On the contrary, moves toward the lower-end – around $40 billion – were associated with short-term pullbacks, though these dips were often quickly bought up by market participants.
At the moment, the 58,7 billion dollar reading falls in the middle of this range. It reflects the consolidation observed around mid-2021. The analyst explained that:
We can say that the fundamentals of the market are stable as long as this indicator is above $40 billion. Increasing volumes will signal a stronger market and fresh inflow of capital. A drop of more than $40 billion over a period will signal a decline in network demand. It may also be the beginning of an even deeper correction.
Is BTC Preparing For A Big Move?
Bitcoin’s network volume may indicate that the market has reached equilibrium. However, other on-chain metrics suggest otherwise. hint at a potential breakout building in the background – possibly paving the way for renewed bullish momentum.
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As an example, BTC’s short-term holders floor is rising. steadily It has hovered around 98,000 dollars in the last few months. It provides a solid base that could prevent a sudden correction to the downside.
The pressure to sell from both miners and investors is beginning. increase – casting some uncertainty over BTC’s short-term price trajectory. BTC is currently trading at $106,528, a drop of 0.9% over the last 24 hours.
Charts from TradingView.com and CryptoQuant.com.
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Source: www.newsbtc.com
