Data shows that Bitcoin trading volume has hovered near one-year highs recently as activity on Binance remains high after the fee was removed.
Bitcoin’s 7-day average trading volume has remained at high levels in recent weeks
According to the latest weekly report from Arcane Research, about 80% of the latest activity on the BTC network is powered by cryptocurrency exchange Binance.
“Trading volume” is an indicator that measures the total amount of Bitcoin moved on the blockchain on a given day.
When the value of this metric is high, it means that a significant number of coins are changing hands on the network right now. This trend may suggest that the chain is quite active these days as investors are attracted to the cryptocurrency.
On the other hand, low values of the indicator indicate that the network activity is not so high at the moment. This type of trend could be a sign that the general interest around cryptocurrency among traders is currently low.
Now, here is a graph showing the trend of Bitcoin trading volume over the last year:
The value of the metric seems to have been high in the last few days | Source: The Arcane Research Weekly Update – Week 30, 2022
As you can see from the chart above, Bitcoin transaction volume has been high for the past few weeks. Currently, network activity is just below a one-year high. However, it is likely that not all of the volume at this time is caused by organic activity.
The chart also includes data on Binance’s share of the total volume. It seems that when the value of the indicator rose to the current high levels, the contribution of the cryptocurrency exchange increased simultaneously.
The reason behind this is that about three weeks ago, exactly when these increases were seen, Binance lowered the trading fee for some Bitcoin trading pairs.
Seeking to exploit this fact, many merchants have indulged in “wash trading” to unlock higher fee levels on the platform. Such activity is considered inorganic and is therefore falsely inflating the actual volume.
However, three weeks later, volumes are still unchanged, and while Binance’s share remains around 80%, the report notes that a significant portion of the volume may come from organic activity.
This activity would come from traders who prefer to trade on Binance due to the removal of the fee, which would help keep the crypto exchange’s market share fairly high.
