Bitcoin Market Depth Thins: Spot Volume Drops To Lowest Since October 2023

On-chain data shows the Bitcoin spot volume has observed a notable decline, something that could make the market more sensitive to flow shifts.

Bitcoin Spot Volume Has Gone Through A Decline Recently

As highlighted by on-chain analytics firm Glassnode in an X post, the Bitcoin Spot Volume has declined to multi-year lows. The “Spot Volume” here refers to an indicator that measures, as its name suggests, the total amount of the cryptocurrency (in USD) that’s becoming involved in trading activity on the various centralized spot exchanges.

When the value of the metric rises, it means the investors are ramping up their spot trading activity. Such a trend suggests interest in the cryptocurrency is increasing.

On the other hand, the indicator observing a decline implies investors may be shifting their attention away from the asset as the number of tokens becoming involved in spot trades is going down.

Now, here is the chart shared by Glassnode that shows the trend in the Bitcoin Spot Volume over the last few years:

As displayed in the above graph, the Bitcoin Spot Volume witnessed a sharp spike following the price crash at the start of February, but the elevated trading activity lasted only temporarily as the metric soon plunged back to low levels.

Since then, the indicator has continued to move down, implying investors have been disengaging with the market. Interestingly, the downtrend has maintained despite the price recovery that BTC saw in April.

Recently, the Spot Volume dropped to its lowest levels since October 2023, showcasing just how low trading interest around the cryptocurrency has become. “Such low volume environments often coincide with reduced market depth and heightened sensitivity to flow shifts,” noted the analytics firm.

In some other news, the Bitcoin Coinbase Premium Gap has assumed a significantly negative level, as CryptoQuant community analyst Maartunn has pointed out in an X post. The Coinbase Premium Gap keeps track of the difference between the BTC prices listed on Coinbase (USD pair) and Binance (USDT pair).

As the below chart shows, the indicator’s value has plummeted to a value of -$30 recently, suggesting that BTC has been trading at a discount on Coinbase as compared to Binance.

Bitcoin going for a lower rate on Coinbase naturally implies that users of the platform have been applying a higher amount of selling pressure than Binance traders. Alongside the recent Coinbase selling, BTC has observed a retrace, a potential sign that American institutional entities, the platform’s largest users, could be involved.

BTC Price

At the time of writing, Bitcoin is trading around $76,400, down 1.5% over the past week.