Bitcoin exchanges over the past year have seen shrinking trading volumes which is being seen as a huge negative and has made many believe that many exchanges could go out of business if the trading volumes do not pick up in the near future. Bitcoin prices have plummeted over the last year and are showing no signs of reversal at the current moment which has meant flagging investor interest which has meant lower trading volumes across the board. Volatility is directly correlated to trading volumes in all exchanges and a drop in volatility in the prices of Bitcoin over the past few months has kept investors away which has caused serious concerns about the viability of many Bitcoin exchanges.
Many believe that the reduction in volatility has been on the back of the overall growth of the Bitcoin ecosystem and the introduction of sophisticated investors. Many believe that sophisticated investors have been able to introduce hedging techniques and provided the much needed liquidity which is a huge positive for the exchanges in the near term. Many industry experts believe that the closure of exchange can turn out to be a huge positive for the market-place overall as currently the exchanges are very fragmented which raise the risk of defaults.
When looking at the daily chart for Bitcoin, the digital currency has broken below the psychological support zone of $300 and currently trades near multi-year lows of $274. The Bitcoin is in a strong downtrend and shows no signs of bullish reversal. The relative strength index along with the stochastic oscillators continue to trend lower which is indicative of the strong selling pressure present at current levels. It is imperative to state that the crypto-currency trades below all important daily moving averages which is a huge cause for concern for traders. The next level of support is near the $252 levels.