Bitcoin lost almost 10% last week, but what’s even more significant is that the BTC price lost a crucial psychological level at $60,000. When major support zones like this are breached, traders often lose patience, potentially leading to additional selling pressure.
Recent analysis by popular crypto trader Ali regarding the Exchange Volume Momentum indicator for Bitcoin reveals a concerning trend as well. This indicator has shown a sustained drop in exchange-related on-chain activity, which typically suggests lower investor interest in Bitcoin and decreased network usage.
The Exchange Volume Momentum indicator is a metric that tracks the flow of Bitcoin to and from exchanges.
The Exchange Volume Momentum indicator shows a sustained drop in exchange-related on-chain activity, which usually points to lower investor interest in #Bitcoin and decreased network usage. pic.twitter.com/bBwSwYAt6r
— Ali (@ali_charts) September 1, 2024
It measures the rate of change in the volume of Bitcoin being transferred to and from exchange wallets. A decline in this indicator suggests that fewer people are moving their Bitcoin to exchanges. This could imply a decrease in trading activity or a shift towards holding rather than selling.
When this indicator shows a sustained drop, it often correlates with periods of reduced market interest and can precede further price declines. However, it’s important to note that no single indicator can predict market movements with certainty, and other factors should always be considered when analyzing Bitcoin’s price trajectory.
This decrease in activity could potentially lead to additional selling pressure on Bitcoin’s price, especially in light of the recent breach of the $60,000 support level.
Read also: Here Are the Crypto Tokens to Watch This Week: $FTM, $MATIC, $ADA, and Other Top Altcoins
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