• The trends of declining volume and low volatility are back in the bitcoin market, likely indicative of a complacent and decimated market.
• September and November 2021 were the peak months of action in bitcoin volume, since then volume in both the spot and perpetual futures markets have been in steady decline.
• The destruction of FTX and Alameda has led to a large liquidity decrease in the market.
The bitcoin market is currently experiencing a period of declining volume and low volatility, indicative of a complacent and decimated market. This comes after a wave of capitulation in early November 2021 which saw an historically low period of volatility.
The peak in market activity was seen in September and November 2021, with both spot and perpetual futures markets experiencing high volume. Since then, however, the volume in both markets has been steadily decreasing. This decrease in market volume has been further exacerbated by the destruction of FTX and Alameda, both of which were major players in the bitcoin market. This has resulted in a large decrease in liquidity in the market.
These current conditions could be indicative of another leg lower to come in the market. However, the bitcoin price is yet to produce a clear change in trends, and the market continues to suffer from the lack of volatility and activity. It remains to be seen how long this period of low activity and low volatility will last, and when the bitcoin market will see an explosion of market volatility and activity that will define market pivots and major directional moves in the future.