Bitcoin trading volume hits a "two-year low"! Market depth shrinks as major macro events loom, volatility could strike at any moment

The calm before the storm? Bitcoin spot trading volume has recently frozen, with daily volume falling below $8 billion, hitting a new low since October 2023! Glassnode warns that liquidity depletion will make the price extremely sensitive to large capital inflows and outflows, potentially triggering violent fluctuations at any time. However, the options market expects a stable trend, with volatility dropping to a three-month low. With the Fed (FOMC) interest rate decision arriving tonight, coupled with the energy crisis brought about by the UAE's withdrawal from OPEC, macroeconomic variables could shatter this fragile calm at any moment. (Previous coverage: Bitcoin plunges to $75,600! OpenAI revenue drags down tech stocks, 72,000 people liquidated for $189 million in 24 hours) (Background supplement: High volatility warning! Bitcoin bears "pay 19% interest" to bet on a decline, clashing with the largest coin-hoarding wave in history; extreme long-short standoff brews a major market move) While the market is increasingly bullish on BTC breaking through $77,500 and continuing to rally, actual participation in the spot market is cooling rapidly. This superficial calm is likely... According to the latest data from on-chain analysis firm Glassnode, the daily trading volume of Bitcoin changing hands has recently plummeted to less than $8 billion. This is the lowest level since October 2023. It is worth noting that during the market frenzy in early February this year, this figure once exceeded the $25 billion mark. The sharp contraction in trading volume directly affects the underlying liquidity health of the market. Glassnode warned in its report: "This low-volume environment is typically accompanied by a decline in market depth and extreme sensitivity to changes in capital flows." Market Depth is usually measured by observing the volume of buy and sell orders within 2% of the current price and is a key indicator for assessing the market's ability to absorb large orders without triggering significant slippage. When market depth shrinks, it means that orders from market makers and buyers/sellers are sparse, and a few large orders are enough to push the price up or crash it significantly. In other words, the declining trading volume is laying the groundwork for imminent violent volatility. However, faced with potential liquidity risks, traders in the derivatives market seem to have everything under control. The Volmex BVIV index, which measures Bitcoin's 30-day expected price volatility, has fallen to a three-month low, with annualized volatility below 42%. This clearly indicates that participants in the options market are betting that the market will remain calm, without pricing in the storm that liquidity depletion might trigger. This relaxed mindset is particularly dangerous because global markets are facing an intensive macroeconomic stress test. First, the Fed will announce its latest interest rate decision later today (the 29th). Although the market generally expects interest rates to remain unchanged, investors' focus will be entirely on Jerome Powell's policy statement. If the Fed expresses strong concern about the rising inflation triggered by recent turmoil in the energy market (releasing hawkish signals), it could mean a long-term stagnation in rate cuts, or even reignite concerns about rate hikes, thereby suppressing risk assets, including cryptocurrencies. Marex analysts accurately commented on the current situation in their morning report: "Bitcoin is currently hovering around $77,000, a market unwilling to commit before the Fed meeting. The market looks calm, but it is actually tense. Positioning is cautious, liquidity is thinning, and the next market driver is more likely to come from 'macroeconomics' rather than crypto-native events." Analysts further emphasized that the UAE's announcement on Tuesday to withdraw from OPEC and OPEC+ has made energy politics the biggest macroeconomic variable. If energy supplies become unpredictable, risk assets will remain highly sensitive to news headlines. Faced with this game of chips and macroeconomics, investors should strictly control leverage risks and not take things lightly.