A recent Cointelegraph report shows that spending on Bitcoin (BTC) has declined since March 9 amid the worsening of the coronavirus pandemic. Data from blockchain analysis company Chainalysis also shows that even the amount of Bitcoin spent on illicit activity via darknet markets is down from pre-coronavirus levels.
Despite the reduction in transactions, traders still view current prices as a good investment opportunity and Glassnode data shows that the number of Bitcoin whales holding at least 1,000 BTC has reached its highest level in over 2 years. This shows that investors still feel optimistic about Bitcoin’s future prospects and with the halving to just 31 days, it is useful to analyze the trading volume and the trading patterns.
Number of transactions drops to October 2018 levels
Bitcoin transactions are down from March 12, when the price of Bitcoin lost more than 50%. The current daily volume reflects October 2018 levels at around 281,700 daily transactions. At the same time, the daily amount of Bitcoin sent from unique addresses faced a decline of 43%, while the average Bitcoin transaction fees fell to $ 0.503.
Daily transactions from October 2018 to April 2020. Source: Bitinfocharts
This shows that the uncertainty surrounding Bitcoin’s bullish scenario in the midst of the global economic crisis caused by the global quarantines is prompting investors to act more cautiously.
The volume increases considerably on Monday
Historically speaking, data analysis indicates that the volume of Bitcoin faces a large discharge on Saturday and shows the highest growth on Monday.
Even if the degree of growth differs between 2017 and 2019, the consistency of the average daily increase in volumes leaves little room for doubt. On Monday, the volume of Bitcoin increased by 19% in 2017, 9.4% in 2018 and 10.4% in 2019.
In a contrasting scenario, Bitcoin’s maximum daily volume losses materialize on Saturday, with transactions plunging between 7.4% and 17.7%.
Days with higher volume show higher yields
The daily volume model has been equivalent for the past three years when assessing year-over-year volume performance. As previously shown by Cointelegraph, a similar effect occurs when isolating the day of the week with the highest and lowest average Bitcoin returns.
The price of Bitcoin experiences the largest increases on Monday, either in bullish or bearish scenarios, while more recent data from January 2019 to January 2020 suggests a higher return for investors on Friday.
Cash orders and perpetual contracts are moving in the same direction
Skew’s data is also shows that over the past 30 days, Bitcoin perpetual contracts traded on BitMEX have similar volume swings on the days identified by the previous analysis. The volume seems to be higher on Fridays, Thursdays and Mondays in crypto exchanges.
Average volume of BitMEX XBT perpetual contracts – USD, 30 days. Source: Skew.com
Besides the perpetuals model, most Bitcoin spot exchanges on Binance and Coinbase in Tether (USDT) take place on the same days. In addition, the most active hours are also recurrent – 10 a.m., 12 p.m., 1 p.m. and 4 p.m. – in cash orders and perpetual contracts.
Average binance of BTC spot volume – USDT, 30 days). Source: Skew.com
Mondays and Fridays Post Largest Increase During Corrective Period
Given the last correction period, which took place from February 19 to March 12, Saturdays continue to post the largest average volume decline at 23.3%. Meanwhile, since March 13, a consistent pattern of higher volume growth occurs on Monday, followed on Friday.
Average daily transaction volume for each day of the week since January.
From a broader perspective, Thursdays and Fridays have the highest average daily volume of all days of the week since the start of the year. Surprisingly, the daily trends keep their solidity through different price cycles over the years.
While large economies are shrinking significantly due to the global increase in coronavirus cases, uncertainty and fear remain the common denominators that will determine whether traditional markets and crypto assets will recover in the short term.
Bitcoin daily volume and price data from coinmarketcap.com. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Each investment and trading movement involves risks. You have to do your own research when you make a decision.