The trading volume of Bitcoin has reached its lowest point in nearly five years as investors remain on the sidelines, seeking reasons to reengage in the cryptocurrency market.

A comprehensive examination of data from both spot and derivatives exchanges, conducted by analyzing CryptoQuant’s data, underscores the decline in Bitcoin’s total volume across all trades earlier this month. The data illustrates that Bitcoin’s volume plummeted to levels not seen since 2018 and has struggled to regain momentum.

On August 26th, CryptoQuant reported that Bitcoin’s trading volume across all exchanges was 129,307 BTC. However, on August 12th, it dipped to 112,317 BTC, marking its lowest since November 10, 2018. This represents a significant drop from the March peak of 3.5 million BTC, amounting to approximately a 94% decrease.

Julio Moreno, the Head of Research at CryptoQuant, highlighted, “Trading volumes decrease in bear markets as retail investors leave. This happened during 2022 on most exchanges. As we progress into a bull market, the trading volume may continue to increase.”

Despite the quiet summer that Bitcoin traders have experienced, with the usual seasonality partially contributing to the lull, external factors have also played a role.

The U.S. regulatory crackdown on cryptocurrencies and the resolution of the banking crisis in May (which had significantly influenced the year’s gains) have deterred market participants from active involvement.

Even after Bitcoin witnessed a substantial sell-off on August 17th, marking the most significant one-day decline since the FTX fallout in November, the market swiftly settled into a calm state. Data indicates that long-term investors have primarily remained resilient in recent market fluctuations.

Gautam Chhugani, an analyst at Bernstein, pointed out the subdued sentiment within the market, stating, “Overall, the market remained dull waiting for a new catalyst, and the overall market liquidity remained scant.”

Chhugani emphasized that the market’s attention is fixated on forthcoming catalysts, particularly decisions on the numerous spot Bitcoin ETF applications awaiting approval from the Securities and Exchange Commission (SEC).

Looking ahead, analysts like Chhugani and institutions such as Cantor Fitzgerald underscore the importance of the long-term perspective. They believe that while short-term catalysts may vary, the fundamental narrative of sustained crypto adoption and Bitcoin’s role as an alternative asset and store of value remains intact.

The significance of the Bitcoin halving, with the next one expected in spring 2024, aligns with the idea of persevering through market cycles for potential opportunities.