While Bitcoin Price continues to linger around $10,000, traded volume on spot exchanges has surprisingly hit a 5- month low of $55 Billion in August. This indicates a fall of 50% in the past two months.
Bitcoin’s Traded Volume Hits A 5-Month Low
While Bitcoin continues to soar high, it’s trading volume, unfortunately, doesn’t share the same fate. Larry Cermak, a famous crypto researcher has come up with an interesting finding. He explains that while the prices are shooting high, the traded volume is something to ponder upon.
1/ While the price of Bitcoin continues to hover around $10,000, traded volume on spot exchanges has hit a 5-month low of $55 billion in August— falling by 50% since only two months ago. pic.twitter.com/ifTstjUrgA
— Larry Cermak (@lawmaster) September 3, 2019
He further explained that spot trading volume has served as a lagging indicator of price. This implies that as the prices increase more people start trading and thus the volume goes up. Interestingly, August seems to have a massive discrepancy in the last three years.
The discrepancy further suggests that there might be a spike in volume in September or even a price correction.
Binance Secures 55% of Traded Volume, Other Exchanges Still Lag Behind
Considering the case of August, Binance managed to secure 55% of traded volume, whereas Coinbase recorded 14% of the volume. Bitfinex was a close second with 9%. While, Kraken, Bitstamp, and Bitflyer noted 8 percent, 7%, and 3 % respectively.
Further, Coinbase, Bitflyer, and Bitstamp have recorded great gains in 2019 Coinbase’s and bitFlyer’s volume is up nearly three times compared to January. On the other hand, Bitfinex and Bittrex have shown abysmal gains, approaching the same volume as at the bottom of the bear market.
CFTC Probe Responsible for Low Derivatives Volume
If we look at the derivatives volume, the volume on BitMEX, the dominant derivatives exchange, has seen a decrease from $65 billion in July to less than $52 billion in August. The drastic drop in volume can further be attributed to the CFTC probe.
With that being said, regulators want to make sure BitMEX has not followed any way to shatter rules set and allowed US residents to trade on the platform. As per the current law, residents from the United State is excluded using BitMEX’s services and regulators suspect that BitMEX allowed US residents to use its crypto derivative platform.
While the interest currently appears to be decreasing, next month might be a game-changer. If in case the traded volume shows similar trends, it might lay the foundations of an all-time trading volume low. Will the trade volumes keep up with the price rise? Let us know what you think?
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Coming from a physics background the unpredictability and intrigue of the cryptoverse attracted me to take a dive in this field. I am all eyes and ears for the latest trends in blockchain and crypto sphere. Whenever I am not writing or researching, I love to read sci-fi novels, play basketball and watch action movies. I strongly believe that blockchain and cryptocurrency will bring lasting transformations in people’s lives in the years to come. You can reach out to me at supriya [at] coingape.com.