Data shows that Bitcoin trading volume has remained near one-year highs recently as activity on Binance remains high after the fee was removed.
Bitcoin 7-day average trading volume has remained at high values in recent weeks
According to the latest weekly report from Arcane Research, around 80% of the recent activity on the BTC network is powered by the crypto exchange Binance.
“Trade volume” is an indicator that measures the total amount of Bitcoin moved on the blockchain in a given day.
When the value of this metric is high, it means that a significant number of coins are changing hands on the network right now. Such a trend could indicate that the chain is quite active at the moment as investors are drawn to the crypto.
On the other hand, low values of the indicator suggest that network activity is not that high at the moment. This type of trend could be a sign that the general interest in crypto among traders is currently low.
Now, here is a chart showing the trend in Bitcoin trading volume over the past year:
The value of the metric seems to have been high in recent days | Source: Arcane Research's The Weekly Update - Week 30, 2022
As you can see in the graph above, Bitcoin trading volume has increased over the past few weeks. Currently, network activity is just under a one-year high. However, it is likely that not all of the volume right now is caused by organic activity.
The chart also includes data for Binance’s share of total volume. It seems that when the indicator’s value shot up to today’s high levels, the crypto exchange’s contribution to it increased at the same time.
The reason behind this is that around three weeks ago, just as these increases were observed, Binance dropped the trading fee for selected Bitcoin trading pairs.
To take advantage of this fact, many traders indulged in “wash trading” to unlock higher rate levels on the platform. Such activity is considered inorganic and thus falsely increases the real volume.
Three weeks later, however, volumes still haven’t budged, and while Binance’s share remains around 80%, the report notes that it’s possible that a significant portion of the volume could come from organic activity.
Such activity will come from traders who prefer to trade on Binance due to the removal of fees, thus helping to keep the crypto exchange’s market share quite high.
At the time of writing, Bitcoin’s price is hovering around $22.9k, down 1% in the last week.
Looks like the value of the crypto has been moving sideways at a lower level in the last few days | Source: BTCUSD on TradingView
Featured image from Amjith S on Unsplash.com, charts from TradingView.com, Arcane Research