https://ift.tt/Hq2muVM, volume drops 60% in first quarter

Bearish sentiment has caused Bitcoin’s trading volume to plummet 60% this year compared to last year.

Data on Bitcoin transaction volume

Bitcoin trading volume on exchanges during the first quarter of the year dropped 60% globally compared to last year. 

In fact, in the first quarter of 2022, it totaled $2,420 billion, while in the first quarter of 2021 it was as high as $6,020 billion. 

However, it is worth noting that between January and March 2021 there was a real bull run going on, with the price heading from $29,000 in December 2020 to $64,000 in mid-April 2021, whereas this year there was a bear market going on. 

Analysis by Be[In]Crypto Research reveals that the reason for the two-and-a-half-fold reduction in quarterly trading volumes was due to bearish sentiment in 2022, compared to bullish sentiment last year. 

Despite this, the price of Bitcoin seems to be starting to recover from the bearish trend that began in December. 

This trend has caused investors’ interest in Bitcoin and cryptocurrencies in general to dwindle, and it seems that it has been the decline in interest in Bitcoin that has generated bearish sentiment across crypto markets. 

A closer look at the data 

Looking at the individual monthly data reveals that in January 2021 the trading volume was 2,150 billion, with a single daily peak of 123 billion. In January 2022, on the other hand, the total monthly volume fell to just 923 billion, with the single daily high of less than 85 billion. 

Even worse was February, the month of the invasion of Ukraine. Last year in February the total volume was $2.260 billion, with the daily peak as high as $350 billion, while this year Bitcoin’s monthly volume plummeted to $671 billion, with a daily peak of just $46 billion. 

This is a 70% reduction on a monthly basis, and an 86% reduction in the daily peak. 

In March, there was a tentative rebound in volumes. 

Last year the monthly volume was $1,610 billion, with a daily peak of $70 billion, while this year the monthly volume was $830 billion with a daily peak of $39 billion. 

The daily peak in March 2022 was therefore only slightly lower than in February, but the monthly volume was 23% higher than in the previous month. It was 48% lower than in March 2021. 

In the recently concluded first quarter of 2022, Bitcoin’s price opened at around $46,000, hit a quarterly high of around $48,000 and then closed at around $45,500. It also touched a low of just over $33,000. 

Last year the quarter started at $28,900, and after hitting a quarterly high of $61,700, it closed at $58,900.

So perhaps it is not so much the quarterly volumes of the first quarter of 2022 that were low, but perhaps it was those of the first quarter of 2021 that were very high. 

The drop after the 2021 boom

The report does not disclose the Q1 2020 figure, but it was certainly well below the $2.420 billion in Q1 2022. 

The fact that 2021 was a very special year for the crypto markets was already well known to all, but this data makes clear the magnitude of the difference compared to 2022, despite the average price level being more or less in line. 

What has changed above all is the trend, which has turned from bullish to bearish. After all, the very large number of small investors or retail speculators are mainly attracted by bullish trends, so this difference is not at all surprising.