Key Points
- Bitcoin’s trading volume on Binance has decreased, making the market more vulnerable.
- Retail interest in Bitcoin remains inconsistent, indicating uncertain short-term market sentiment.
Bitcoin [BTC] has been struggling to maintain its momentum after a brief period of optimism in early December. The cryptocurrency has recently slipped below the $100,000 mark and has remained relatively stagnant.
Currently, Bitcoin’s price stands at $92,790, which is a 13.2% decrease over the past two weeks. At this price, Bitcoin is trading 14.2% below its all-time high of $108,135, which was achieved earlier in December.
Decline in Trading Volume
One of the main reasons for this lackluster performance is the significant drop in Bitcoin trading volume on Binance, the world’s largest cryptocurrency exchange. The trading activity for both spot and Futures BTC/USDT pairs has sharply declined over the past week.
Centralized exchanges like Binance play a crucial role in providing liquidity and maintaining equilibrium between supply and demand. With reduced activity on Binance, the market has become more vulnerable as lower demand makes it challenging to counter selling pressure.
Unstable Retail Activity
Data from Coinglass shows that Bitcoin’s Open Interest, which represents the total value of outstanding futures contracts, has decreased by 2.58% to approximately $57.66 billion. This indicates a reduced interest from Futures traders.
However, Bitcoin’s Open Interest volume has surged by 71.7%, now valued at $109.92 billion. This suggests that while fewer traders are active, those still participating in the market are taking larger positions.
Bitcoin’s active address count, which reflects the number of unique Bitcoin addresses involved in transactions on a given day, also provides insight into retail participation. This count has been inconsistent, indicating a lack of sustained retail momentum.
