Bitcoin Avg Daily Trading Volume on ATH, Current Accumulation Period around ATVWAP Level to Continue for Several Months
According to the crypto analyst, Christian Ott, the Bitcoin accumulation period will keep on going for several months now which means 2019 is not expected to see a potential uptick which have been called out by many experts, however, historically this period will follow a rise in price.
Bitcoin Avg Daily Trading Volume on ATH
Unlike the popular Bitcoin price analysis tools like TA or the metrics where a fair is assigned to a coin on the basis on the number of factors, Ott is working on the overlooked method to analyze price that is the “all-time volume-weighted average price (ATVWAP).”
Instead of simple average price, the method chosen here is ATVWP because the average price comes at 1600 USD (Bitcoin’s daily price from last 9 years added up and divided by the number of days traded publicly) that is taken as a fair price which, he says is not reasonable.
He argues that not every day has the same weight as in the early days that is from 2010 to 2012, Bitcoin didn’t have a lot of traction. So, the fact that a day in 2010 with the trading volume of 2000 BTC is weighted the same as a day in 2019 with a trading volume of more than a million BTC is not right.
“However, the price is way more significant with a high trading volume. The more people buy or sell Bitcoin for a certain price, the more it is an indicator that many people agree on this price being fair in that specific moment.”
Average Daily Trading Volume of Bitcoin (in BTC)
The volume increased over the years and an average price of Bitcoin in 2011 is not as significant as in 2019, as more Bitcoin has been exchanged this year than in 2011. That’s why weighing the price of Bitcoin by volume to determine a volume-weighted average price (VWAP) gives a better view of the fair price of BTC.
Now, it can be seen that Bitcoin has three major bull runs, each time after which the price decline massively. According to ATVWAP, in 2015, the price decline was very close to the actual bottom while in 2011 and 2018, the price went below ATVWAP so the author states that it cannot be considered a clear bottom for every major price decline.
“After the two declines in 2011 and 2014, Bitcoin had an accumulation period close to the ATVWAP. “Close to” means in this volatile market a price difference of +25% to -25% in comparison to the ATVWAP.”
In 2012, the accumulation period lasted from January to July where price hovered between 4.5 USD to 6.5 USD while ATWAP has been at 5.5 USD. In 2015, accumulation lasted from January to October that is 10 months.
Since late 2018, we have been seeing an accumulation period that has been going on for about 4 months now. Though it is not certain that this will happen, historically, accumulation period would continue “until the 2nd half of 2019 followed by a price surge of Bitcoin above the ATVWAP value.”
The sample size to guarantee price action is small but throughout history, Bitcoin has been mostly trading above ATVWAP. After the two major bull runs of 2011 and 2013, the accumulation period around ATVWAP occurred for several months and the recent price decline in 2018 also went below these metrics.
“If history will repeat itself, the current accumulation period around the ATVWAP level would continue for several months followed by a price surge after that.”