Markets
Falling volumes on centralized exchanges point to bigger changes to come
Trading volume on centralized cryptocurrency exchanges has declined significantly, falling to $5.27 trillion in May 2024. This drop, approximately 20.1% from the previous month, marks a downward trend continues following moderate Bitcoin price activity following its launch. Halve in April.
Crypto Exchange Landscape and Institutional Interest
According to CCData reports, this deceleration affects both spot markets and derivatives markets. Spot trading fell 21.6% to $1.57 trillion. The decline was slightly less pronounced, at 19.4%, on the derivatives front, totaling $3.69 trillion.
Despite the overall decline, derivatives trading claimed increased market share, a shift attributed to the U.S. Security and Exchange Commission’s (SEC) unexpected approval for spot exchange-traded funds (ETFs). Ethereum. This approval triggered a 50.3% increase in Ethereum derivatives open stake to $14.0 billion.
When it comes to market presence, Bybit reached an all-time high in spot market share at 7.36%, even as its trading volume contracted by 12.7%. Binance, maintaining its lead, captured a 34.6% share of the spot market.
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/1 Our latest Exchange magazine is now live! This monthly report provides readers with an overview of #crypto trading volumes.
In May, the combined volume of spot and derivatives trading on centralized exchanges fell 20.1% to $5.27 billion, as $BTC & $ETH remained largely restricted to its range. pic.twitter.com/oh17A52ump
–CCData (@CCData_io) June 5, 2024
In the derivatives sector, Binance has also increased its dominance to 45.4%, with competitors OKX and Bitget also holding substantial shares.
Meanwhile, the US stock market CME posted mixed results; While the overall volume of its derivatives declined, ETH futures and options skyrocketed, hitting record highs of $20.5 billion and $931 million, respectively. This recovery suggests a growing institutional fascination, particularly following regulatory advances.
The trading scene in May also reflected a reactive adjustment to regulatory developments, including the SEC’s approval of spot Ethereum ETFs– a decision that temporarily increased commercial activities.
Bitcoinist, citing the CryptoQuant report, recently reported that such regulatory nods often lead to speculative trading, as evidenced by large outflows from major exchanges like Coinbase and Kraken.
Continued stock market outflows signal bullish sentiment
Recent reports reveal that on-chain data detected significant Bitcoin exits from Coinbase, suggesting possible large-scale acquisitions. According to a CryptoQuant Quicktake analysis, Coinbase experienced significant capital outflows for the seventh time this year.
The “exchange outflows” metric, which measures the volume of Bitcoin withdrawn from exchange wallets, indicates that investors are withdrawing their assets to hold them for the long term, hinting at strong bullish sentiment.
These movements are not isolated to Coinbase; Kraken has also seen significant releasesrecording the highest movement of Bitcoin and Ethereum since 2017.
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Kraken: the biggest $BTC And $ETH Releases since 2017!
“Kraken #Bitcoin reserves fell to the same level as in 2018, now holding 122,300 BTC. For #Ethereumthis is the first time that the Kraken’s reserves have fallen below a million units, a level not seen since the beginning of 2016.” – By… pic.twitter.com/pS4kEajpHF
– CryptoQuant.com (@cryptoquant_com) June 3, 2024
This trend highlights broader market behavior in which large holders are moving from short-term trading to permanently securing their assets. Such strategic withdrawals often signal positive prospects for future price appreciation, reflecting investor confidence in the enduring value of cryptocurrencies.
Featured image created with DALL-E, chart from TradingView