It has been a week of caution for Bitcoin traders as the cryptocurrency’s price action remains subdued. In tandem with this, trading volumes on major crypto exchanges for both spot Bitcoin trading and Bitcoin derivatives have experienced a significant decline. This downward trend in trading volumes begs the question: what does this mean for the future price of Bitcoin?

Decline in Derivatives Trading Volumes:
Since the first quarter of the year, on-chain data from CryptoQuant charts have consistently showcased a downward trajectory in the daily spot and derivatives trading volume of Bitcoin. The decline has been particularly notable in the derivatives or futures market, which has witnessed a staggering 96% drop since its peak during the Silicon Valley Bank fiasco in March. The spot market has also slumped by 98% during this period.

Bitcoin Spot Trading Volume Takes a Hit:
Over the past week, Bitcoin spot trading volume has experienced a significant decrease, as indicated by data from CoinMarketCap. Within a 24-hour timeframe, the spot trading volume of Bitcoin has declined by 33.67%. A deeper analysis from CryptoQuant’s data reveals a sharp decline of 81% in spot exchange trade volume, dropping from 50,692 at the beginning of the week to 9,627.

Falling Derivatives Volumes Accentuate the Trend:
The declining trend becomes even more apparent when considering the falling derivatives volumes as well. According to on-chain data collected by CryptoQuant, the volume of derivatives trade has plummeted to 108,852. This represents a significant 88% decrease from the volume of 950,331 recorded at the start of the week.

Implications for Bitcoin’s Price:
The dwindling activity in these markets implies waning interest from institutional traders and retail investors. The next few weeks are crucial as they may shape Bitcoin’s near-term direction. As the largest cryptocurrency in the world, Bitcoin’s performance often sets the tone for the broader crypto market.

With Bitcoin currently trading at around $26,556, the lack of significant trading activity may result in sideways movement or even downward pressure on its price. The pivotal support level to watch for is at $25,000, and a breach below this level could signal an extended bearish trend with increased selling pressure.

On the other hand, the lower price point may attract investors, potentially leading to a resurgence in trading volumes. Notable crypto analyst Captain Faibik suggests that Bitcoin could dip as low as $23,000 in October before rebounding and reaching $34,500 by early next year. Additionally, CEO of Bitcoin joint mining business Xive, Didar Bekbauov, believes the price of Bitcoin could surpass the year-to-date (YTD) price of $31,700.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.