Does trade volume dictate the price of Bitcoin or is the BTC rally independent of its impact?

  • 12 July 2019, Friday, 14:40

The bull run of Bitcoin in 2019 has been one of its kind. After the price ricocheted between the range of $3800 and $5000, the virtual asset pumped massively to the surprise of everyone, even its ardent followers.

Bitcoin kept exhibiting progressive growth from the start of April, which led to Bitcoin outperforming the likes of S&P 500 and Nasdaq.

The rise of Bitcoin in 2019 also led to speculation of various contributory factors. A part of the community claimed that people were more educated with regards to the virtual asset, as Google trends reported a drop in Bitcoin keyword search in 2019, indicating that the knowledge spread of Bitcoin was organic. On the other hand, others stated that when Bitcoin crossed the key resistance of $6000 in May, investors started to exhibit FOMO in the market and the sentiment transpired throughout the space.

Recently, the high rate of trading volume was indicated to be a crucial factor. It can be observed from the chart that the digital currency was always overbought in the market whenever Bitcoin breached an important resistance. The scenario was witnessed three times, and each time a key resistance was broken. At press time, Bitcoin was still consolidating at a higher range, but trade remained low after a minor bearish run hit the market a few days back. The RSI indicator also mediated in the neutral zone.

Josh Rager, a popular crypto-analyst, also suggested that the current trade scenario might open up a “short the rally” situation and predicted that the price might go up to a maximum of $12,000 with the current volume.