Even if bitcoin prices rise up again, it doesn’t mean everything is OK for whom invest on it. According some experts, bitcoin transaction volume has reduced since December and it might point something not so good, like a new possible price down.
You’ll find a lot of explanations for the fall-off in trading, from software- to news-related. What’s much less understood is why the level hasn’t recovered as Bitcoin’s value made a 50% comeback due to the fact Feb. five. That is left some investors asking yourself whether or not the cryptocurrency is waning in popularity.
The typical number of trades recorded day-to-day has roughly dropped in half from the December highs and touched its lowest in two years final month, even as Bitcoin became a household name and roared back above $10,000.
The transaction information may well be negative news for Bitcoin bulls, as outlined by Charles Morris, chief investment officer of Newscape Capital Group in London, who invests in cryptocurrencies. Trading and purchases on the Bitcoin network, which can be measured by metrics like transaction volume, is indicative of cost direction, he said.
“We had a hype-cycle and now it is cooling down,” Morris, who’s operating on a project that will facilitate price tag discovery in various cryptocurrencies, stated by telephone from London. “We just may well be getting into a bear market” for Bitcoin.
Transactions plunged from a seven-day average of almost 400,000 in mid-December to about 200,000 this week, based on study firm Blockchain.information. The last time it was this low, the currency traded beneath $500.