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Author Topic: Price correlated with exchange volume  (Read 1099 times)
bitcoinBull
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October 24, 2011, 06:56:23 AM
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Been wanting to chart this correlation for a while.  I'm not sure what to make of it.

My intuition is that unless the volume peters out, price will find a bottom.  At $0.10/BTC, $100k buys a million bitcoins.  But the record volume in BTC is between 100k-200k.

"volume should be lower during wave two than during wave one".  Its getting lower, but will it fizzle out?  Or will it pick back up?

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kripz
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October 24, 2011, 08:47:39 AM
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Supply and demand?

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October 24, 2011, 11:09:11 AM
 #3

That is to be expected in an overall uptrend and cannot be another way. Also notice how the correlation begins to reverse short term during the downtrend.

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October 24, 2011, 12:12:11 PM
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Bitcoin's fundamental value is to facilitate commerce.  Volume on the exchanges is likely correlated (over the long enough time frames) with the amount of commerce that is actually taking place.  The more commerce that takes place, the higher the demand for bitcoins.  Thus, I think it stands to reason that exchange volume would be correlated with price.  This correlation might start to break down as more people that transact in bitcoin start holding bitcoin (because they can use it to subsequently pay for things or services) rather than immediately selling it on an exchange.

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bitcoinBull
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February 21, 2012, 01:02:05 PM
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Volume has been higher than the price since the bottom in November.  Contrast that to the downtrend, where volume tended to be lower.

Even if we test $4 and see $3.xx again soon, rising volume leads me to believe price will go back up in the short/mid-term.

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realnowhereman
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February 21, 2012, 01:45:17 PM
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You're kidding aren't you?

"Volume ($) is correlated with price ($)"

If volume were a constant 100,000 BTC then you would get exactly that correlation; yet volume of BTC would be completely uncorrelated with price.

Plot it again with volume in BTC plotted against price in USD for a more informative chart.

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