Bitcoin Volume and Returns Remain Stable Amid Global Economic Uncertainty

Published at: April 11, 2020

Recent reporting by Cointelegraph shows that Bitcoin (BTC) spending has retraced since March 9 amid the worsening coronavirus pandemic. Data from blockchain analytics firm Chainalysis also shows that even the amount of Bitcoin spent on illicit activities through darknet marketplaces is down from pre-coronavirus levels.

Despite the reduction in transactions, traders still view the current prices as a good investment opportunity and data from glassnode shows that the number of Bitcoin whales holding at least 1,000 BTC has risen to its highest point in more than 2 years. This shows that investors are still feeling bullish about Bitcoin’s future prospects and with the halving only 31 days away it is useful to analyze trading volume and transaction patterns.

Number of transactions drop to October 2018 levels

Bitcoin transactions are down from March 12 when Bitcoin’s price lost more than 50%. Current daily volume mirrors October 2018 levels at around 281,700 daily transactions. At the same time, the amount of daily Bitcoin sent from unique addresses has faced a 43% pullback, while the average Bitcoin transaction fee is down to $0.503.

Daily transactions from October 2018 – April 2020. Source: Bitinfocharts

This shows that the uncertainty around Bitcoin’s bullish scenario amid the global economic meltdown caused by worldwide quarantines is causing investors to act with more caution.

Volume grows significantly on Mondays 

Historically speaking, data analysis indicates that Bitcoin's volume faces a significant dump on Saturdays and shows the highest growth on Mondays.

Even though the degree of growth differs between 2017 and 2019, the consistency of the daily average volume rise leaves little room for doubt. On Mondays, Bitcoin's volume grew by 19% in 2017, by 9.4% in 2018 and by 10.4% in 2019.

In a contrasting scenario, the maximum daily losses in Bitcoin's volume materialize on Saturdays, with transactions dipping between 7.4% and 17.7%.

Days with higher volume show higher returns

The daily volume pattern is equivalent across the last three years when evaluating year-on-year volume performance. As previously shown by Cointelegraph, a similar effect arises when isolating the day of the week with the highest and lowest average Bitcoin returns.

Bitcoin's price experiences the greatest increases on Mondays, whether in bull or bear scenarios, while more recent data from January 2019 to January 2020 suggests a superior return for investors on Fridays.

Spot orders and perpetual contracts move in the same direction

Data from Skew also shows that in the last 30 days, Bitcoin perpetual contracts traded on BitMEX exhibit similar volume oscillations on the days identified by previous analysis. Volume seems to be higher on Fridays, Thursdays and Mondays across crypto exchanges.

BitMEX average XBT–USD perpetual contract volume, 30 days. Source: Skew.com

Besides the perpetuals’ pattern, most of Bitcoin's spot trading on Binance and Coinbase in Tether (USDT) occurs on the same days. Moreover, the hours with the most activity are recurring as well — 10 a.m., noon, 1 p.m. and 4 p.m. — in both spot orders and perpetual contracts.

Binance average BTC–USDT spot volume, 30 days). Source: Skew.com

Mondays and Fridays show the largest increase during a corrective period

Considering the latest correction period, which took place Feb. 19 through March 12, Saturdays keep showing the biggest average fall in volume at 23.3%. Meanwhile, since March 13, a consistent pattern of superior volume growth happens on Mondays, followed by Fridays.

 

Average daily transaction volume for each day of the week since January.

Taking a broader view, Thursdays and Fridays present the highest average daily volume from all days of the week since the start of the year. Surprisingly, daily patterns keep their solidity across different price cycles across the years.

As major economies dramatically scale down their activity due to the worldwide increase of coronavirus cases, uncertainty and fear remain the common denominators which will determine whether traditional markets and crypto assets recover over the short-term.

Data for Bitcoin’s daily volume and prices drawn from coinmarketcap.com. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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