A few days to the third Bitcoin halving event, Larry Cermak observes that traffic to cryptocurrency exchanges fell in April. Following in tandem were shrinking trading volumes calling into question whether the highly anticipated price volatility expected in the next few days will live up to its bill.
Through his favorite medium, Larry notes:
“Overall crypto exchange traffic is down in April and so is volume suggesting that the hyped up euphoria might not live up to expectations. Interest isn’t there as much as people would like to think.”
Overall crypto exchange traffic is down in April and so is volume suggesting that the hyped up euphoria might not live up to expectations. Interest isn’t there as much as people would like to think pic.twitter.com/2s9FLFD6cx
— Larry Cermak (@lawmaster) May 6, 2020
BitMex, Coinone Traffic Shrink While OkEx, Luno Remain Attractive
Leading exchanges that have been hit hard include BitMex which seems to struggle after the Black Thursday event wrecked derivatives traders, Coinone whose fortune has never been the same after losing over $500 million of NEM through a hack in 2018, and UpBit—a leading crypto exchange in South Korea which lost over $50 million through in late 2019. Trackers reveal that hackers are still moving stolen coins.
⚠ 2,000 #ETH (418,531 USD) of stolen funds transferred from Upbit Hack Nov 2019 to unknown wallet
— Whale Alert (@whale_alert) May 6, 2020
Traffic to BitMex, Coinone, and UpBit fell 40 percent, 51 percent, and 36 percent in April.
On the flip side, OKEx traffic more than doubled, registering a 238 percent increase in the same period.
South Africa-based Luno also attracted new clients as traffic rose 25 percent while OKCoin, the regulated wing of OK Group specializing in spot trading of digital assets, which got a green light from Japanese authorities also posted positive traffic in April.
OKEx traffic rose to 5.2 million while Binance’s traffic marginally shrunk by two percent.
Are Bitcoin Holders not as aggressive or Coronavirus preventing users to funnel funds to Crypto?
Traffic can be used as a popularity metric, safe when there are abnormal events where traffic to affected ramps spike, this gauge is important.
An exchange can be popular due to its security, products, responsiveness, and other secondary factors. Here, however, the drop in traffic and therefore trading volumes can hint of waning interest ahead of Bitcoin halving.
Observed in other Proof-of-Work currencies as Litecoin and Bitcoin Cash which have halved in recent months, the stature of Bitcoin as a secure and popular network whose coin acts as a base currency in most exchanges means there may be fireworks next week.
As such, risk-averse traders may be recoiling preferring safety over the gush for quick profits explaining the unexpected drop in crypto trading volumes.
The havling is priced in by the people that know about. The question is, what is a bigger effect, the people that know or don't? Litecoin halving was last year and it 5X'ed in 6 months for comparison. Bitcoin has a much larger markecap, so multiples will be smaller. pic.twitter.com/JMAB5QdbBm
— Grain of Salt (@Z06Z07) May 5, 2020
Another explanation could be the state of global markets as coronavirus ravages economies. BTC is a speculative asset but retail traders, one explains, has no spare change to channel to digital currencies.
Because of lock-downs, their preference shit and they rather watch from the sidelines.
“We are going through the biggest health crisis of our lifetime. People are losing jobs left, right and center. Bitcoin is retail interest driven speculative asset and retail is broke. I suppose the fake pumps and non-stop shilling will subside soon due to the lack of interest!”