It has, therefore, acted as a leading indicator of Bitcoin's 'health'. Historically, if there is not sufficient volume travelling through the blockchain then a Bitcoin bull run cannot begin.
The efficacy of this tool is likely to diminish over time for three main reasons:
1. More bitcoin is being held off-chain on exchanges. 2. Growth over time of layer two solutions such as the Lightning network. 3. More Bitcoin held en-mass by third-party companies who allocate their clients purchases within their large wallets - meaning that a transaction is not recorded on the blockchain but is instead recorded on the third party database.
The preferred source for this data is calculated by Coinmetrics.io. Unfortunately, Coinmetrics only make this data (BTC denominated daily volume) available to large private institutions.
The proxy used here is from blockchain.info which may have some accuracy issues. It's accuracy will be monitored over time.
Any information on this site is not to be considered as financial advice. Please review the Disclaimer section for more information.