On October 6, CCN reported that the volume of Ripple has declined by more than 50 percent within the past four days. Since then, XRP has declined by around eight percent against the US dollar.
The volume of Bitcoin has slightly recovered to $2 billion on CoinCap.io and $3.3 billion on Coinmarketcap, but the dominant cryptocurrency has not recorded any significant increase in volume and price to suggest that a short-term rally is in play.
Ripple (XRP), Basic Attention Token (BAT), and Decentraland (MANA) remain as the worst performing cryptocurrencies on October 7, recording losses in the range of five to seven percent against both the US dollar and Bitcoin.
Yesterday’s report on the cryptocurrency market by CCN emphasized the low volume of Bitcoin and the inability of the cryptocurrency market to initiate a meaningful increase in valuation in the short-term without a promising recovery by BTC.
“Given the low volume of Bitcoin and the weakening $6,500 support, in the short-term, it is highly likely for BTC to record a minor decline in value based on technical indicators and its price trend since mid-September,” the report read.
Eventually, the volume of Bitcoin dropped to a yearly low across all cryptocurrency exchanges, as technical analyst Edward Morra reported.
The decline in the volume suggests that Bitcoin is more biased to the bears than bulls in the market. With the Relative Strength Index (RSI) of Bitcoin at around 50, BTC is not demonstrating oversold conditions either, which decreases the probability of an upside movement.
“This is the lowest recorded daily volume in more than a year at least (as much as I could squeeze on the chart leaving chart readable) while hovering around the POC of the whole 2018. This is combined volume from various exchanges.”
The decline in the volume of Bitcoin, which occurred in the past 72 hours, portrays the intent of many traders in the cryptocurrency exchange market to simply observe the price trend of major cryptocurrencies and wait for a potential breakout in the higher region of $6,000.
Given that a decline in volume could also demonstrate intensifying seller fatigue and the lack of willingness of bears to continue the sell-off of BTC in a low price range, BTC could initiate an unpredictable short-term rally in the upcoming days as it had done in July.
The 50 percent decline in the volume of Ripple and the lack of momentum of tokens have shown that investors are not willing to take high risk, high return trades in a period of uncertainty.
Ripple has had two productive months in September and October, securing major partnerships with influential financial institutions including Banco Santander.
However, until the daily trading volume of the cryptocurrency exchange market recovers and exchanges begin to see a revival of trading activity, it is highly unlikely for any major cryptocurrency to initiate a short-term rally unless the market starts to demonstrate oversold conditions.
Featured Image from Shutterstock. Charts from TradingView.