Bitcoin trading volume hits two-year low

The seven-day average of Bitcoin’s daily transaction volume has hit its lowest point in two years, recently falling below 160,000 for the first time since March 2016.

The decline in trading volume also coincided with a change in Localbitcoins’ weekly Bitcoin trading volume, which fell below 6,000 for the first time since February 2014.

Bitcoin's daily transaction volume hits two-year low

The number of confirmed Bitcoin transactions has fallen sharply in recent weeks, with the seven-day average for Bitcoin falling from an all-time high of nearly 350,000 on December 16, 2017 to a low of between 150,000 and 155,000 in February 2018, according to Blockchain.info.

The recent period of calm marked the first time since March 2016 that the seven-day average transaction volume fell below 160,000.

Market cycles

The decline in Bitcoin trading volume has been interpreted by some analysts as a very bleak market outlook for Bitcoin.

Charles Morris, chief investment officer at Newscape Capital Group, described volume as a signal of volatility in price action. "A hype cycle just went through, and now it's cooling off. We may be entering a bear market," Morris said.

Kyle Samani, founder of Multicoin Capital, believes that the decline in transaction volume reflects that many businesses no longer use Bitcoin as a means of payment, and emphasized that "merchants, payment processors and online gambling are moving away from Bitcoin."

LocakBitcoin global trading volume hits four-year low

As trading volume decreased, the number of global Bitcoin transactions on Locakbitcoin also dropped significantly.

Data from Coin.dance shows that in the past ten weeks, the number of Bitcoin transactions on Locabitcoins has fallen below 6,000 twice, on December 30, 2017 and February 24, 2018. Curiously, around December 30, the volume of Bitcoin transactions weakened, while the weekly price of Bitcoin for P2P transactions on Locabitcoins reached an all-time high.