- Bitcoin trading volume on CEXs drops to 2020 levels.
- BTC investors have taken a step back and shifted to holding their coins.
As Bitcoin [BTC] consolidation persists, on-chain activities have declined significantly.
According to CryptoQuant’s analyst Axel Adler, the average Spot Trading Volume on centralized exchanges has dropped to October 2020 levels.
Source: CryptoQuant
The significant drop suggests that the market is experiencing reduced trading activity, with speculation dwindling across the board.
As a result, user participation has declined, with Active Addresses plummeting sharply.
Over the past month, the number of active users has fallen to a monthly low of 779.8K, reinforcing the observation that market demand is weak and interest in Bitcoin is fading.
Source: CryptoQuant
Historically, such market conditions often precede either a strong breakout or extended consolidation.
At present, participants are stepping back, waiting for ideal momentum before re-entering.
According to Adler’s analysis, the market has shifted into HODL mode, with few coins being sold on spot or moved on-chain.
This indicates that investors are holding onto their assets, resisting short-term fluctuations, and demonstrating strong conviction.
Source: CryptoQuant
The shift in market sentiment is reflected in the Mean Coin Dollar Age, which has surged to 18.03 million.
A sustained rise in this metric suggests that coins are aging without being spent, indicating strong holding behavior.
As a result, trading volume is declining, with investors keeping assets off exchanges.
Looking back at 2020, when exchange volume dropped to similar levels, the market cooled before rallying to a new high in 2021.
What’s next for Bitcoin?
As observed above, Bitcoin is currently in a quiet phase, with market participants showing indecisiveness.
As a result, exchange activity has declined significantly, with the Fund Flow Ratio dropping sharply over the past week.
Source: CryptoQuant
With exchange activity drying up, Bitcoin is entering a low-volatility phase, where prices consolidate until a market trigger pushes movement up or down.
Historically, low trading activity has often preceded volatility expansion, especially after accumulation periods like the current one.
If the historical cycle holds, Bitcoin is likely to trade sideways before breaking upward. In the short term, BTC could fluctuate between $104K and $107K, then push toward $109,208.
However, if market sentiment shifts from HODLing to selling, this bullish outlook would be invalidated, leading to a downside break.
In that case, BTC may retrace to $101,500 amid sell pressure.
