The crypto and Bitcoin bulls have all rallied together and have been supportive of the fact that so far, Bitcoin has had a good start in 2020. This comes despite the tensions that are currently building up between Iran and the U.S.
Bitcoin Price Movements
There are facts about Bitcoin that must be acknowledged and taken seriously. One of them is the fact that the coin’s price dropped significantly last year for a six month period leading up to December 2019. The crypto’s price then dropped below the psychological $7,000 level, at the beginning of the New Year, eventually bouncing back over this level after a few hours.
Statistics from crypto analysts indicate that Bitcoin is now trading at its lowest volume since April last year. This is because the coin has dropped in volume by more up to 90% since its high in June 2019. What does this mean? With such low volumes, it means that the market can easily take very sudden and volatile turns.
An analyst from Arcane Research wrote that the average trading volume for the last seven days has continued to drop. To put this into perspective, on the first day of 2020, only $192 million in Bitcoin volume was traded. This low volume was last seen in April last year. The analysts have advised that while the trading volume could be a result of the recent holiday season, they also commented that it did not reflect a positive trend for the leading cryptocurrency.
To top it off, the falling volume seems to be getting worse. Interestingly, in October last year, crypto analysts had already warned investors about the ‘dismal’ Bitcoin trading volumes.
Expecations for 2020
At the beginning of 2020, due to the announcement of the Libra project by Facebook, Bitcoin’s volume increased and this was due to the fact that Bitcoin is closely linked to excessive social media coverage. However, this increase did not last for long as the Bitcoin price quickly started dropping again. In fact, the trading volumes of BTC are now almost back to the level of under $4,000, where Bitcoin traded at, at the beginning of 2019.
Bitcoin bulls need to be watching the markets closely. There are high chances that things might change later in the year and this comes as a result of the many events expected in 2020. These are changes that may work to the advantage of Bitcoin, enabling it to return its former glory. However, the closest event is expected to only take place in May when the Bitcoin halving will take place. That is, when this happens, the number of new Bitcoin rewarded to miners, will be halved. Then in July this year, it is expected that Facebook will launch its Libra cryptocurrency. Another event expected is the launch of the Starbucks project by Bakkt. Bakkt is a New York Stock Exchange-owner backed Bitcoin and cryptocurrency venture. In October last year, they announced that they plan to launch a consumer app for crypto purchases in 2020. There first launch partner will be Starbucks, the U.S. coffee chain. Interestingly, Starbucks is one of the original backers of the crypto project, including Boston Consulting Group and Microsoft.