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Bitcoin was hot, and then suddenly, it is not. In March, Bitcoin still trades at above the $10,000 levels, but something seems off: the trading activity has been dwindling, and this is especially noticeable in dollar volumes.

Additionally, Bitcoin's network has never been emptier. Despite the unprecedented, rising hashing power, transaction backlogs are at very low levels, with down to 3,000 unconfirmed transactions, 100 times less than the peak levels at the end of last year. SegWit may be helping as well to clear the backlog. But this does not change the fact that statistics point to less usage for Bitcoin - in spending, but also in moving BTC coins between exchanges.

In general, crypto trading has been subdued, with volumes around $17 billion in 24 hours, down from peak levels of around $50 billion. Bitcoin's dominance as a fraction of trading has been on the rise again, at above 40%, as altcoins also lost trading volumes. GDAX volumes against the USD have dwindled to as low as 9,000 BTC, making the current BTC prices extremely shaky and prone to manipulation.

And what is even more telling, the searches for Bitcoin have dwindled as well.

 

What is even more curious is that Asian trading remains as robust as ever, and Japan is still the dominant force behind Bitcoin, as the Japanese investors accumulate coins.

But some believe the stricter attempts to look into crypto holdings by the US Securities and Exchange Commission, and by European Authorities may be scaring traders away, at least temporarily. The recent lawsuits against Coinbase, and the talk of revealing user information, may have frightened off traders, who are confused about their activity triggering a reportable tax event.

And if the volume drop remains temporarily low, it is possible that the markets see a bounce as the year progresses, in a manner similar to the boom cycle of 2017.

Others believe lowered volumes may be an indication of the intention to hold onto coins, and see them appreciate much more in the longer term, despite temporarily low volumes. The other possibility is that the overheated markets may have caused a withdrawal, especially from new investors, who have little to do but observe the value of their coins and keep them for better days.

Yet for many traders, the crypto market is at a crossroads. Either Bitcoin slides much lower, or another bull run takes it above the level at which retail investors buy in fear of missing out.

Local Bitcoins volumes have also been sinking to levels last seen in 2016, when Bitcoin was still not receiving as much mainstream attention, and the price moved sideways for a long time.