Cryptocurrency trading volumes have fallen to their lowest level since 2020

According to data compiled by CryptoCompare, spot and derivative market volumes across cryptocurrency exchanges fell by more than 15 % since May to around $4.2 trillion amid a market correction. It proving that the market has yet to recover from the historic damage caused in the second quarter of this year.

Low trading volumes will continue

Trading volumes for cryptocurrencies, which are closely tied to broader market sentiment, fell by more than 28 % to $1.41 trillion in June, hitting the lowest level seen since December 2020. she stated Bloomberg agency. The situation did not improve much in July, the current volume is still more than 15 % lower than in May.

Katie Stockton, co-founder of Fairlead Strategies, said the low volume is likely to persist until the market turns around:

“Volume decreased due to reduced investor enthusiasm in a cyclical bear market. Until cryptocurrency prices break out of the bear cycle, which could take months, we can expect volume to continue to be below average.”

In June, CME Group BTC futures contracts reached only $29 billion, the lowest level since July 2021. It is worth noting that the primary cryptocurrency closed its worst quarter in a decade, as BTC was below the key $20,000 mark on July 1 .

In such a bearish state, JP Morgan strategists even predicted on Thursday that BTC will continue to fall as its average cost to produce it has fallen from $24,000 in early June to $13,000 at current levels.

Coinbase leads in declines

The sharp drop in trading volume has seen the dominance of leading exchanges such as Coinbase diminish. The American giant experienced a sharp drop in volume amid the ongoing crypto winter, which resulted in it dropping out of the top 10 crypto exchanges ranked by trading volume.

Bloomberg reported that it had just 2.9% average market share among the top 30 in June, down from a 3.6% average in Q2 and 5.3% in Q1. Mizuho Securities USA analyst Dan Dolev said it is suffering from competition from other challengers due to structural problems in its business model.

Coinbase is currently only the 14th largest exchange by trading volume, down from 4th at the end of 2021.

Amid growing concerns about whether its earnings trajectory is on track, Coinbase decided to cut costs as Q1 revenue fell 27 % year-over-year. It then announced 18 % job cuts, citing the noticeable effects of the looming recession and aggressive rate hikes by the Fed.

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.