Volume Rises to “Bull Market Levels” as Bitcoin Recovers from IPC Slump

Bitcoin Archive tweeted that BTC volume is “rising to bull market levels,” while highlighting a continued monthly increase since August.

Bitcoin Weekly Chart 2
Source: @BTC_Archive on Twitter.com

That in itself cannot be taken as a definitive sign of the return of the bull market. However, along with the Bitcoin consumer price index (CPI) on Thursday, there is a degree of hops.

bitcoin recovers

On October 13, the US Bureau of Labor Statistics (BLS) released CPI data for September showing consumer price inflation at a headline rate of 8.2% yr after year.

The figure was higher than expected, leading some to conclude that efforts to control inflation were failing.

Roughly two hours before the announcement, Bitcoin sank 2% as market jitters took hold. Strangely, on the eve of the announcement, BTC rose rapidly, erasing those losses.

Despite that, once the IPC data was released, the bears took over, resulting in an immediate drop bottoming at $18,200 during the 13:00 (UTC) hourly candle.

In another unexpected twist, the hourly candlestick at 16:00 (UTC) posted a 3.5% gain, triggering an uptrend that reached a high of just under $20,000 in early Friday hours.

Bitcoin hourly chart
Source: BTCUSDT on TradingView.com

The events could be described as a roller coaster of emotions that somewhat overrode fears of market weakness, at least in the short term.

Bitcoin closed Thursday up 1% at $19,380 and, at the time of writing, has largely continued to hold onto those gains.

Volume

Every transaction requires a buyer and a seller. Once an agreement is reached on the price, the transaction is recorded as volume.

As such, volume refers to how many units of a particular cryptocurrency have been traded over a specific period of time.

It is considered one of the fundamental influences on price action. Traders often use volume to gauge understanding of the strength of a trend.

If volume increases, whether prices go up or down, the general rule of thumb is that price will continue its current trend. However, if volume is declining, the current price trend may not hold its course.

The Bitcoin Archive chart shows a decline in price as volume increases. As such, based on this single metric, the price of Bitcoin is likely to continue trending down.

Posted in: Bitcoin, Bear Market

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