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Crypto trading volumes on major cryptocurrency exchanges fell dramatically in April. Trading volumes declined for the first time in seven months after Bitcoin's price fell from an all-time high of $73,800, Bloomberg reported on Friday.
The trend continues in May as spot and derivatives trading volumes decline, driving Bitcoin and altcoin values to fall further. The bitcoin price fell to $60,400 after Fed officials' comments and new data on inflation expectations weighed against rate cuts, as per Coingape.
Centralized Exchange Trade Volume Plummets in April Amid Crypto Market Stagnation and External Economic Pressures
Spot trade volume on major centralized exchanges, including Coinbase, Binance, and KuCoin, fell 32.6% to $2 trillion in April, according to CCData. Furthermore, derivatives trading volumes fell 26.1% to $4.57 trillion, marking the first dip in seven months.
Trading volumes increased dramatically earlier this year following the approval and listing of US spot Bitcoin exchange-traded funds (ETFs) in January. The April 19 Bitcoin halving also failed to result in a dramatic surge in BTC price or a crypto market revival, with the price falling below $60,000.
“Consistent with patterns observed in the last two cycles, trading activity on centralized exchanges typically slows in the two months following the Bitcoin halving event,” said Jacob Joseph, a research analyst at CCData.
Furthermore, the United States faces sticky inflation and stagflation problems. The Federal Reserve undermined market sentiment. Furthermore, higher CPI inflation statistics, escalation of Middle East tensions, and potential bank run concerns injected some uncertainty and panic into the market. The sentiment shift resulted in negative net flows from spot Bitcoin ETFs.
Binance Spot Market Share Drops Amidst Sharp Decline in Trade Volumes, CME Group Bitcoin Futures Volume Falls
Binance, the world's largest cryptocurrency exchange, had its spot market share fall by 4% to 33.8% for the first time since September 2023, as trade volumes fell sharply.
Furthermore, CME Group, the largest Bitcoin futures market, saw cryptocurrency trading volume fall nearly 20% to $124 billion.
“Despite this, while trading activity on centralized exchanges has slowed down compared to its peak in March, it remains at a heightened level compared to the volumes recorded in the other months,” Joseph said.
Bitcoin Breaks Key Trendline, Fueling Crypto Market Recovery Amid Lingering Pullback Concerns
CoinGape properly predicted the recent crypto market recovery, with Bitcoin chart patterns confirming a breakthrough above the trendline. The Bitcoin price rose from $60,630 to $62,585 in a few hours on Thursday after a 3-day falling trendline was broken in a shorter span. The price reached a high of $63,446 today, while other cryptocurrencies like ETH, SOL, XRP, DOGE, and SHIB all recovered.
However, concerns about a pullback linger due to option expiry and upcoming economic data this week and next.
A breakout above the declining channel since mid-March would be positive for the Bitcoin price to reach $100,000. This will corroborate the post-halving Bitcoin price rally, causing a broader crypto market rally.
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