Volume surges to ‘bull market levels’ as Bitcoin snaps back from CPI decline
Bitcoin Archive He tweeted that BTC’s trading volume was “climbing to bull market levels,” highlighting its continued monthly increases since August.
By itself, it cannot be taken as a definitive sign that the bull market is back. Nonetheless, there is some hopium, coupled with Bitcoin’s consumer price index (CPI) surging Thursday.
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On October 13, the US Bureau of Labor Statistics (BLS) released its consumer price index data for September, showing that overall consumer prices rose 8.2% year-over-year.
The figures are higher than expected, with some concluding that efforts to curb inflation have failed.
About two hours before the announcement, Bitcoin fell 2% as market anxiety took hold. Oddly enough, on the eve of the announcement, BTC surged upwards, wiping out those losses.
Nevertheless, once the CPI data was released, the bears took the lead and bottomed out at $18,200 during the hourly candle at 13:00 (UTC).
In an even more unexpected development, the hourly candlestick at 16:00 (UTC) registered a 3.5% gain, triggering an uptrend that peaked just under $20,000 early on Friday.
The event, at least in the short term, has been an emotional roller coaster that somewhat negates concerns about market weakness.
Bitcoin rose 1% to $19,380 on Thursday and continues to sustain these gains at the time of writing.
Volume
Each transaction requires a buyer and a seller. Once a price agreement is reached, the trade is recorded as a volume.
As such, volume refers to the number of units traded of a particular cryptocurrency during a particular period of time.
This is considered one of the fundamental influences on price action. Traders often use volume to understand the strength of a trend.
If the volume is increasing, the general rule is that the price should maintain its current trend, whether it goes up or down. However, if the volume is declining, the current price trend may not continue.
The Bitcoin Archive chart shows that the price is falling as the volume increases. So, based on this single metric, Bitcoin’s price is likely to continue its downward trend.
