Crypto Analysis: Why Bitcoin Might Face Another Price Correction in September?

While Bitcoin Price continues to linger around $10,000, traded volume on spot exchanges has surprisingly hit a 5- month low of $55 Billion in August. This indicates a fall of 50% in the past two months. 

Bitcoin’s Traded Volume Hits A 5-Month Low

While Bitcoin continues to soar high, it’s trading volume, unfortunately, doesn’t share the same fate. Larry Cermak, a famous crypto researcher has come up with an interesting finding. He explains that while the prices are shooting high, the traded volume is something to ponder upon.

He further explained that spot trading volume has served as a lagging indicator of price. This implies that as the prices increase more people start trading and thus the volume goes up. Interestingly, August seems to have a massive discrepancy in the last three years.

The discrepancy further suggests that there might be a spike in volume in September or even a price correction.

Binance Secures 55% of Traded Volume, Other Exchanges Still Lag Behind

Considering the case of August, Binance managed to secure 55% of traded volume, whereas Coinbase recorded 14% of the volume. Bitfinex was a close second with 9%. While, Kraken, Bitstamp, and Bitflyer noted 8 percent, 7%, and 3 % respectively.

Source- Twitter

Further, Coinbase, Bitflyer, and Bitstamp have recorded great gains in 2019 Coinbase’s and bitFlyer’s volume is up nearly three times compared to January. On the other hand, Bitfinex and Bittrex have shown abysmal gains, approaching the same volume as at the bottom of the bear market.

CFTC Probe Responsible for Low Derivatives Volume

If we look at the derivatives volume, the volume on BitMEX, the dominant derivatives exchange, has seen a decrease from $65 billion in July to less than $52 billion in August. The drastic drop in volume can further be attributed to the CFTC probe.

With that being said, regulators want to make sure BitMEX has not followed any way to shatter rules set and allowed US residents to trade on the platform. As per the current law, residents from the United State is excluded using BitMEX’s services and regulators suspect that BitMEX allowed US residents to use its crypto derivative platform.

While the interest currently appears to be decreasing, next month might be a game-changer. If in case the traded volume shows similar trends, it might lay the foundations of an all-time trading volume low. Will the trade volumes keep up with the price rise? Let us know what you think?

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