ForexMinute.com – When researchers and analysts are actively digging into the reasons behind the Bitcoin’s sudden downtrend, there is a lot to be seen in the coin’s trading volume of last 24 hours. And not just Bitcoin, but the entire cryptocurrency clan is facing a massive drop in their trading volumes at press time.
For example, the trading volume of one of the world’s leading cryptocurrency exchange OKCoin has dropped from 87.9k BTC to 45.7k BTC within just a week. Similarly, BTC China’s volume has slipped from 44.9k to 19.09k BTC since the 9/23 trading sessions. Other exchanges, including Huobi, Bitfinex, etc. have also seen similar drops within the same span.
The reasons for such massive drops are although speculative but indeed are close to right answers. Either there is a very strong negative sentiment in the market against Bitcoin (chances are low), or it is the traders filtering out scam coins from the market. We cannot ignore the fact that the majority of altcoins released now a day are fake, with masked developers and unachievable development schemes. At the same time, only a handful of altcoins are bringing new and innovative changes to the cryptocurrency sector.
A first, traders were indeed counting on altcoins to repeat the Bitcoin’s magic of turning investors rich overnight. A lot of investment was therefore made in other coins – the very first being Litecoin, Namecoin, Dogecoin, etc. But when the cryptocurrency market matured, its investors also started to wipe-off their expectations of making overnight profits. At least now, we can say that no coin can turn you rich quickly. The focus today is more on development. Maybe that’s why cryptocurrencies like Darkcoin and Ripple are booming extensively from recent days. We can thus consider the trading volume drop a “filtering process” which is eradicating garbage out of the market.
Looking at other aspects, the cryptocurrency market itself is under heavy criticism due to its highly volatile behaviors. Against other sort of investments, trading in cryptocurrencies are not considered safer. Several countries have previously warned their citizen of such risks. Even if a 5% of entire cryptocurrency traders are influenced by such warnings, chances of a notable volume drop becomes high.
But nevertheless, low trading volume doesn’t mean the falling reputation, or in worst case the death of cryptocurrency bazaars. It simply means that the traders are now smarter, and would like to invest only in those coins whose future seems bright enough to trust on. The trend of pump-and-dump might be near its end.
To contact the reporter of the story: Yashu Gola at yashu@forexminute.com
For example, the trading volume of one of the world’s leading cryptocurrency exchange OKCoin has […]
