The Drop In Trading Volumes On CEX Is Pushing Bitcoin Into The Unknown
The latest Glassnode report on cryptocurrency trading volumes reveals a worrying trend: a marked decrease in activity on centralized exchange platforms (CEX) and a notable disengagement of institutional investors in the Bitcoin market. Between the reduction in spot volumes, capital outflows from ETFs, and the impact of macroeconomic uncertainties, the cryptocurrency market is navigating a complex period.
The decline in volumes on exchange platforms
Trading volumes of Bitcoin on centralized exchange platforms (CEX) have seen a marked decline, as indicated by the latest data from Glassnode. This reduction is a key indicator of the decreased appetite of investors for trading on the cryptocurrency market. The average monthly transaction volume is now significantly below the annual average, highlighting a lack of engagement from traders in the current context. CEXs, essential for speculation and price discovery, show a generalized contraction of volumes, a phenomenon that is not limited to a single platform.
Advanced metrics like the 90-day MinMax Scalar illustrate a continued decrease in spot volume momentum, reinforcing the idea of declining demand. Selling pressure has increased over the past three months, contributing to the devaluation of Bitcoin. This dynamic is also confirmed by the CVD (Cumulative Volume Delta), a metric that measures the balance between buying and selling pressures in spot markets. The increased selling pressure has significantly contributed to the recent observed price drop.
The decline in capital flows into Bitcoin ETFs
In parallel with the contraction of volumes on CEX, Bitcoin ETFs are also experiencing net capital outflows. Since August 2024, Bitcoin ETFs in the United States have been recording average outflows of 107 million dollars per week. Between August 27 and September 6, US ETFs suffered a combined net outflow of 1.186 billion dollars, indicating a decrease in institutional interest in Bitcoin.
This decline is exacerbated by macroeconomic factors, such as the publication of stronger-than-expected economic data in the United States, fueling expectations of a rate cut by the Federal Reserve. As a result, Bitcoin investment products saw outflows of 643 million dollars the first week of September.
The decline in volumes on centralized exchange platforms, combined with the decrease in institutional interest in Bitcoin, illustrates a certain disengagement of both individual and institutional investors in the face of current market uncertainties.
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Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.