Bitrabo Editorial
As per a recent report by Bloomberg, major cryptocurrency exchanges saw a significant decrease in trading volume in April, marking the first decline in seven months.
The drop aligned with a fall in Bitcoin’s price, which had previously reached a record high of $73,700 on March 14th before dropping to $59,000 by late April.
Centralized Exchanges Witness Downturn in Trading Volume
Data from CCData shows that spot trading volume on centralized exchanges like Coinbase Global, Binance, and Kraken fell by 32.6% to $2 trillion in the last month. Additionally, derivatives trading volume dropped by 26.1% to $4.57 trillion, the first decrease in seven months.
Earlier in the year, trading volume surged following the introduction of 11 US spot Bitcoin exchange-traded funds (ETFs) by major asset managers. However, it slowed down due to tightening financial conditions in the US.
The market had been excited about the Bitcoin Halving event on April 19, which reduced newly minted coin supply, but various factors like inflation and geopolitical tensions have added uncertainty to the market.
CME Group Sees Downturn in Crypto Derivatives Volume
Despite concerns about future price gains, Jacob Joseph from CCData notes that the slowdown in trading activity post the Bitcoin Halving event is in line with historical patterns. Factors like high inflation and geopolitical tensions have introduced fear into the market, affecting cryptocurrency prices.
Binance’s spot market share dropped for the first time since September 2023, declining by nearly 4% to 33.8%, while CME Group saw a 20% decline in derivatives trading volume to $124 billion in April.
Although trading volume has reduced from its peak in March, it remains relatively high. This decline reflects the impact of various factors on the crypto market, but it shouldn’t alter expectations of future price increases in the coming months.
The decrease in trading volume underscores the influence of events like the Bitcoin Halving, inflation worries, and geopolitical unrest on the cryptocurrency market. However, the consistent pattern of decline shouldn’t dampen expectations of potential price surges ahead.
Featured image source: Shutterstock, chart from TradingView.com