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Topic: Bitcoin Transaction Volume Is Puzzling Investors (Read 171 times)

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Many transactions are probably made up from people trading funds from one exchange to another etc. It's natural that it would fall in times when the market is down. I'm sure there's a large positive correlation between price and transactions, I'm not sure how much that really tells us.
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http://fortune.com/2018/03/02/bitcoin-price-transaction-volume/

Quote
Earlier this year, when Bitcoin’s price fell by more than 60% from its record close, a less-noticed Bitcoin figure also plunged: the number of daily transactions.

There are many explanations for the fall-off in trading, from software- to news-related. What’s less understood is why the level hasn’t recovered as Bitcoin’s price made a 50% comeback since Feb. 5. That’s left some investors wondering whether the cryptocurrency is waning in popularity.

The average number of trades recorded daily has roughly dropped in half from the December highs and touched its lowest in two years last month, even as Bitcoin became a household name and roared back above $10,000.

The transaction data may be bad news for Bitcoin bulls, according to Charles Morris, chief investment officer of Newscape Capital Group in London, who invests in cryptocurrencies. Trading and purchases on the Bitcoin network, which can be measured by metrics like transaction volume, is indicative of price direction, he said.

“We had a hype-cycle and now it’s cooling down,” Morris, who’s working on a project that will facilitate price discovery in various cryptocurrencies, said by phone from London. “We just may be entering a bear market” for Bitcoin.
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