Bitcoin’s Volume Is The Key Metric To Watch During High Volatility
Today the crypto market looks pretty bloody after a few days in which Bitcoin seemed to be skyrocketing. Now, the most important coin in the market fell below $7.900 once again.
At the moment of writing this article, BTC is trading in the red and the most important coin is priced at $7,958.71.
Crypto strategist and investor at Texas West Capital, Scott Melker, said that it’s definitely wise for traders to get out of BTC’s way these days.
We should be looking at BTC’s volume these days
He also said that he will not be trading altcoins these days and what people should be looking at Bitcoin’s volume as the key metric to watch during times of increased volatility.
“Price and volume are everything. When price and volume rise together (like they are now), it is incredibly bullish. When price rises and volume decreases, watch out. The same goes for the other way. When the price is dropping on increasing volume, the bearish trend is likely real.”
Potential scenarios involving BTC and altcoins
The Daily Hodl revealed that in the past, BTC showed a tendency to “suck the life out of altcoins during times of wild swings.”
It’s also important to understand that as BTC’s dominance of the overall market cap rises, the following scenarios can happen:
When BTC pumps, altcoins, drop, and when BTC drops, altcoins will drop even more.
This scenario led to the creation of a meme depicting BTC as the crypto king.
Regarding where BTC will be heading from here, Melker was looking to see if BTC can hold above $8,200.
“I still think $8200 and $6500 are key levels. $8200 would have people mega bullish. $6500 would have them mega bearish, as we saw when price arrived there. Things could get very interesting soon.”
But, as we reported at the beginning of the article, BTC was not able to hold even above $8,000.
CoinMarketCap is a website that provides cryptocurrency market cap rankings, charts, and more. It was purchased by Binance for $400M in 2020.
Andreas Townsend Author
I am a technical writer, author and blogger since 2005. An industry watcher that stays on top of the latest features, extremely passionate about finance news and everything related to crypto.