Institutional trading activity has cooled significantly as we approach the end of the year. The 7-Day Simple Moving Average (SMA) of Fund Volume has dropped to 36 million, marking its lowest point since late September.
Chart Analysis
The attached chart highlights a drastic shift in market participation:
The November Peak: In mid-November, the market witnessed peak institutional activity with the volume SMA reaching approximately 145 million, coinciding with high price volatility.
The Current Drop: Since that peak, volume has been in a steep downtrend. The green dotted line (SMA-7) has now retraced all the way back to the 36 million mark.
Implications
This decline to September levels suggests a “wait-and-see” approach from institutional investors and funds.
Reduced Liquidity: With the SMA-7 at just 36 million, the market is currently experiencing lower liquidity. This often precedes significant price moves, as lower volume makes it easier for larger orders to impact the price (currently hovering around $87.6K).
Exhaustion: The drop may indicate that the heavy buying or selling pressure seen in November has been exhausted.
Conclusion
The market has entered a period of silence. Investors should monitor this metric closely; a sudden spike in Fund Volume from these lows will likely be the catalyst that dictates Bitcoin’s next major directional trend.
Written by CryptoOnchain