Bitcoin volume experienced a major crash during it initial price dynamicsfalling by approximately 27% and causing another decline in the value of the pioneering cryptocurrency. This significant decline in volume has caught the attention of market participants as a cryptocurrency analyst discusses the mechanism and significance of Bitcoin’s decline in value and whether it means Distribution or accumulation phase.

Bitcoin Price Falls as Volume Drops 27%

Data from CoinMarketCap revealed that the log Bitcoin trading volume collapsed 26.46%, bringing the value to $85.89 billion. This significant drop in Bitcoin volume coincides with a broader correction in the cryptocurrency’s price.

Over the last 24 hours, the price of BTC has dropped to $87,848 (at the time of writing). Cryptocurrency was there before listed above $90,000but recently dropped by 2.87%. This keen drop in volume often indicates: decreased market interest or lack of enthusiasm. However, this may not be true in the case of Bitcoin, as this cryptocurrency is characterized by high market activity in connection with the just concluded US presidential elections, which ended Donald Trump’s victory.

A more likely cause for the decreased volume may be: market consolidationwhere Bitcoin’s price could stabilize before a potential breakout. Backing this up, crypto analyst ‘Personal Trader’ he stated that the market has entered a decline phase where Bitcoin may enter its final stage correction period before reaching the $100,000 threshold.

A decline in the BTC price may indicate a distribution or accumulation phase

Given the recent Bitcoin price drop and volume, a crypto analyst identified as “IonicXBT” went to X to identify and discuss the significance of this decline based on two main trends occurring in the Bitcoin market cycle: the accumulation and distribution phases.

The The accumulation phase that’s when astute money, including investors and institutions, comes into play buy Bitcoin. During this phase, prices are usually low or stabilize after falling. Additionally, Bitcoin trading volume is increasing the same period that buyers step in to raise prices. Moreover, any upward price movement is usually characterized by high volume, which indicates increased buying pressure.

However, the distribution phase is the moment when astute money appears selling or distributing your Bitcoins. During this phase, prices may have peaked or been perceived as inflated. BTC volume is rising while its price is falling, which is a signal intense selling pressure. Moreover, price spikes accompanied by low trading volume suggest faint buying interest, which is a red flag that the astute money is leaving the market.

Based on these Bitcoin phases, IonicXBT revealed that it will call The top and bottom of the Bitcoin market Soon. The analyst showed that Bitcoin is not currently in a distribution phase, meaning it is still a “buyer’s market”, suggesting the potential for future price increases.

Featured image created with Dall.E, chart from Tradingview.com