Bloomberg Reveals Reasons Behind Bitcoin, ETH, SOL, XRP, SHIB Prices Crash
Highlights
- Spot and derivative trading volumes fell for the first time in seven months after Bitcoin price tumbled from an all-time high.
- Major centralized exchanges such as Coinbase, Binance, KuCoin saw volume tumbled 32.6% to $2 trillion in April.
- Sticky inflation and stagflation concerns faced by the Fed worsened sentiment in market.
- Binance market share drop to 33.8% for the first time since September 2023.
- BTC price needs to break above descending channel for rally to $100,000.
The crypto trading volumes on major crypto exchanges tumbled massively since April. The trading volumes fell for the first time in seven months after Bitcoin price plummeted from an all-time high of $73,800, reported Bloomberg on Friday.
The situation continues in May as spot and derivatives trading volumes wane, causing Bitcoin and altcoins prices to dip further. Bitcoin price dropped to $60,400 as Fed officials’ comments and new data on inflation forecasts were against rate cuts.
Trading Volumes Drop Amid Macroeconomic Concerns
Spot trading volume on major centralized exchanges such as Coinbase, Binance, KuCoin tumbled 32.6% to $2 trillion in April, as per data by CCData. In addition, derivatives trading volumes also dropped 26.1% to $4.57 trillion, for the first time in seven months.
Trading volumes skyrocketed earlier this year in response to the approval and listing of US spot Bitcoin exchange-traded funds (ETF) in January. The April 19 Bitcoin halving also failed to bring a sudden increase in BTC price or crypto market recovery, and the price fell 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.
Moreover, the sticky inflation and stagflation concerns faced by the U.S. Federal Reserve weakened market sentiment. Also, hotter CPI inflation data, escalation in the Middle East tensions, and potential bank run concerns pushed some uncertainty and fear into the market. The sentiment reversal caused negative net flows from the spot Bitcoin ETFs.
Binance and CME Group Revealed Low Trading Volumes
The world’s largest crypto exchange Binance saw its spot market share drop by 4% to 33.8% for the first time since September 2023 as trading volumes dipped significantly.
Moreover, CME Group, the largest Bitcoin derivatives exchange, saw crypto trading volume decline 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.
Also Read: Here’s Why Bitcoin Price Is Falling Sharply
BTC Price Awaits Another Breakout
CoinGape accurately predicted the recent crypto market recovery as Bitcoin chart patterns confirmed a breakout above the trendline. BTC price dropped below $61,000 after new inflation data and hawkish Fed officials’ speeches. The price currently trades at $61,094 dragged by negative sentiment in the crypto market.
Moreover, the concerns of pullback still remain due to important May 31 options expiry and economic data coming next week.
A breakout above the 2-month descending channel will be bullish for BTC price to hit $100,000. This will be the confirmation of the post-halving Bitcoin price rally, triggering a broader crypto market rally.
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