NewsletterAltcoin Rally in Doubt Amid Trading Volume Slump: Matrixport
Highlights
- Upbit's trading volume plummets 75%, down to $3.79B from $15B peak.
- Altcoin market cap remains stable at $750B despite volume drop.
- BTC and ETH trades make up just 9% of Upbit's diverse altcoin market.
According to a Matrixport report, the altcoins market is facing a challenging period, as evidenced by the recent sharp decline in trading volumes on Upbit, South Korea’s largest cryptocurrency exchange. This downturn is casting doubt on the ongoing rally of alternative cryptocurrencies.
Substantial Decrease in Trading Volume
Upbit’s 24-hour trading volume has drastically decreased. Having hit $15 billion on March 5, the volume has fallen by 75% to $3.79 billion. This decrease reflects a considerable change from the positive trend that was recorded in the early part of March.
The period of the low trading volume shows the general cooling of the altcoin market. Earlier, the altcoins space has seen huge interest and investment in events of such as the Ethereum Dencun upgrade and the optimism in the crypto market in anticipation of the Bitcoin halving.
Altcoins Trading Volume Plummet
The shrink of trading volume also has consequences on the general cryptocurrency market, more specifically on altcoins. In the first part of the March surge, the total capitalization of altcoins reached $788 billion, the highest level in two years.
This stabilization is simultaneous with the decrease in the trading volumes, posing a question about the future market values of the altcoin market, as per the report.
Upbit’s portfolio is quite diverse as it includes 192 cryptocurrencies and 309 trading pairs, which means a broad interest in different altcoins. The recent slump, as a result, might indicate an alteration in investor behavior, which would be a transition from a high-risk, high-reward approach favored by altcoin traders.
Altered Investment Patterns
Upbit trading pattern analysis shows a peculiar focus among South Korean investors. While in many other platforms, such as Coinbase, trading is dominated by Bitcoin (BTC) and Ethereum (ETH), Upbit’s trading activity is more balanced on multiple altcoins.
Nevertheless, with the current recession, this situation might be changing. Currently, the BTC and ETH trading pairs represent slightly over 9% of the entire 24-hour trading volume of Upbit, and the rest come from the altcoin-fiat trading pairs.
This might be indicative of a change in investors’ approach, possibly in the direction of a more prudent approach in the context of market uncertainty. However, the excitement for altcoins, conditioned on the expectation for unimagined profits, can be no lessened in reversal due to the reconsideration of risk in the current economic and political environment.
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