What has been happening over the past five days provides two important signals for Bitcoin and the entire industry.

One is positive and another one is negative, although we can’t define it as adverse yet.

So let’s go understand the reasons starting with the positive signal that Bitcoin is giving us.

Also yesterday with over $12 billion of volumes traded on the main exchanges for Bitcoin was the fourth day with the highest volume ever.

A day that follows the one with the highest volume record in the history of the king of cryptocurrencies with over $27 billion changed hands.

Since the beginning of the year, there have only been two days with volumes below the $10 billion threshold, a barrier first crossed on December 17, 2020. To have a yardstick for the difference in volumes with previous important periods in the history of the last 12 years, it is enough to remember that in the two days of terror between March 12 and 13 last year, the trading volume calculated in dollars came close to $8 billion for each individual day.

On December 7, 2017, just a few days before the day when Bitcoin touched the $20,000 USD mark for the first time (remaining the all-time record for exactly three years), the counter value of trades on the main exchanges exceeded $7.8 billion.

A different context emerges if we analyze the number of Bitcoins traded during the 24-hour period. With about 300,000 BTC exchanged on the day of January 11, 2021, we are well above the average number of exchanges recorded in December 2017 but far from the records of March 14, 2020, when over 920,000 BTC changed hands in a single day.

But this must give a sense of how the current period is a very important historical moment. Such a high amount of trades recorded over multiple days highlights how the market is undergoing a transformation from retail to institutional trades. Even if compared to those of traditional financial markets it is still a small fraction and compared to those of forex money markets it is a drop in the ocean, moving such important volumes highlights a market definitely changed compared to that of a few months ago.

Bitcoin: signals from the fear and greed index

And let’s come to the other signal, the one I called negative even if in a too pessimistic way. For the first time in over two months, the Fear and Greed index is back below 80 points.

The declines of the last 72 hours put an end to the swings above 90 points. Since the index measuring investor confidence was launched – February 2018 – values above 90 points had never been recorded for such a long period.

It must be remembered that the index is measured with a scale from 0 to 100, where 0 coincides with the lowest value of confidence, while 100 the highest value.

Before the recent phase, which saw the value touch 95 points several times, previously this level – so far the highest recorded peak – was reached for the first time on June 26, 2019. This record had remained inviolate until December 8, 2020.

The index takes as reference various parameters almost entirely referring to Bitcoin, but is considered a thermometer of investor mood for the entire cryptocurrency sector.