Volume rises to “bull market levels” as Bitcoin snaps back from CPI decline
Bitcoin Archive tweeted that BTC volume is “climbing to bull market levels”, while highlighting a continuous monthly increase since August.
That in itself cannot be taken as a definitive sign that the bull market is returning. Nevertheless, in the context of Bitcoin’s Consumer Price Index (CPI) back on Thursday, a degree of hopium exists.
Bitcoin snaps back
On October 13, the US Bureau of Labor Statistics (BLS) released September’s CPI data showing consumer price growth at an overall rate of 8.2% year-over-year.
The figure was higher than expected, leading some to conclude that efforts to tame inflation were failing.
About two hours before the announcement, Bitcoin sank 2% as market turmoil took hold. Curiously, on the eve of the announcement, BTC rallied quickly, erasing those losses.
Despite that, as soon as the CPI data was public, the bears took control, resulting in an immediate drop that bottomed out at $18,200 during the 13:00 (UTC) hourly trade.
In a further unexpected twist, the 16:00 (UTC) hourly candle printed a 3.5% gain, sparking an uptrend that peaked just below $20,000 early Friday.
The events could be described as a rollercoaster of emotions that somewhat allayed 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 on to those gains.
Volume
Every transaction requires a buyer and a seller. When an agreement on the price is reached, the transaction is recorded as volume.
As such, volume refers to how many units of a particular cryptocurrency have been traded during a specific period of time.
It is considered one of the fundamental influences on price action. Traders often use volume to gauge an understanding of the strength of a trend.
If volume increases, whether prices are going up or down, the general rule is that the price will continue its current trend. However, if volume declines, the current price trend is unlikely to sustain.
Bitcoin Archives chart shows a decline in price with increasing volume. As such, based on this single value, the Bitcoin price will likely continue to decline.
