Bitcoin’s price action has been rather lackluster as of late, with bulls and bears reaching an impasse following its surge up to the mid-$11,000 region.
Each dip is met with significant buying pressure, while each push towards $11,600 is rapidly rejected by bears.
This has created a consolidation channel between $11,300 and $11,600. Although neither of these levels have been broken yet, whichever one is decisively surmounted first should provide investors with serious insights into the cryptocurrency’s near-term trend.
The support below where BTC is currently trading is quite significant and helped the crypto dodge any losses resulting from turbulence within the traditional markets seen over the past couple of days.
One result of this consolidation phase has been the diving trading volume.
While speaking about this trend, one analytics platform explained that a rebound in volume coupled with a slight price rise will be a tell-tale sign that a move higher is imminent.
Bitcoin Consolidates Following Strong Push Higher
At the time of writing, Bitcoin’s price is trading up just under 10% at its current price of $11,480. This is around where it has been trading throughout the past few days.
Following news regarding Square’s purchase of $50 million worth of BTC, the cryptocurrency saw some intense buying pressure that propelled it well into the mid-$11,000 region.
After tapping highs of $11,700, it lost its momentum and declined, kicking off the consolidation phase that has lasted ever since.
Because there are no imminent catalysts for upside, it remains unclear what may spark the next bout of trading activity that sends the cryptocurrency surging higher.
A potential stimulus agreement between the White House and Congress could tip the scales into bulls’ favor.
Analytics Firm: BTC Trading Volume Plummets Over Past Week
Per recent data from Santiment, Bitcoin’s trading volume has been collapsing due to the recent consolidation phase.
They spoke about this in a tweet, stating:
“September 24 to October 8 was the highest stretch of volume Bitcoin had seen since mid-May. However, there was a sudden drop-off on October 9, and daily transaction volume hasn’t exceeded $26.2B over the past week.”
Image Courtesy of Santiment.
They further state that a potentially imminent shift in trading volume could signal when the next move higher is coming.
“Look for a rise in volume coinciding with any slight price rise as one of a handful of early signs that BTC is making its move at $12k and beyond.”
If trading volume spikes in tandem with a decline, however, it could be a grave sign for BTC’s outlook.
Featured image from Unsplash. Pricing data from TradingView.