Binance Leads Bitcoin Spot Volume Decline in September

Binance’s Bitcoin Trading Volume Drops Since September 1. Crypto Market Direction Driven by Events, Not External Factors, Says K33.

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Binance, a popular cryptocurrency exchange, played a major role in causing a significant drop in trading volume across the crypto market in September. Research from K33 reveals that Binance’s average Bitcoin trading volume over seven days fell by a whopping 57% since the start of the month. This decline in trading activity on Binance contributed significantly to the overall 48% drop in trading volume observed in the cryptocurrency industry.

Bitcoin trading activity, often referred to as spot volumes, has declined even further over the past week, dropping by an additional 8%. This drop is attributed to the reduced activity on Binance, a major cryptocurrency exchange. In contrast, other cryptocurrency exchanges have seen relatively stable trading volumes during this time. This information was shared in a report by K33, with insights provided by their Senior Analyst Vetle Lunde and Vice President Anders Helseth.

The troubles Binance is currently dealing with involving legal matters with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) might be discouraging market makers from engaging in trading on the platform, as per the analysts. This could be one of the reasons for the decrease in trading volume, and it also affects the overall cryptocurrency market sentiment. However, it’s worth noting that Coinbase, another cryptocurrency exchange currently facing a lawsuit from the SEC, saw a 9% increase in bitcoin trading volume this month, according to the analysts.

Although trading volume has dropped, among the major cryptocurrencies, bitcoin has taken the lead in a spot-driven surge. Its price has increased by 8% in the past week, reaching a three-week high, according to the analysts. Ether and BNB have also seen gains of 6% each during this period. Additionally, Toncoin has experienced significant growth, rising by 45% in just seven days and securing a spot in the top 10 cryptocurrencies by market capitalization.

Institutional Traders Show Mixed Sentiment

Lunde and Helseth said indicators also suggest a growing bullish outlook among derivatives traders on CME, marking a departure from the bearishness that dominated since mid-August. The past week alone witnessed a 19% surge in bitcoin open interest from active market participants, with futures premiums climbing, they said.

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However, the derivatives market isn’t entirely bullish. CME’s ether open interest declined by 17% over the past week, with ether futures maintaining a relative premium discount to bitcoin as noted by the analysts last week. This indicates that speculators remain less enticed by the prospect of an ether ETF and the potential market impact of an approval, they added. Rewrite this in simpler terms.

Crypto Market Direction Driven by Specifics, Not Macros

In a significant change from before, 2023 has seen the crypto market influenced more by events within the crypto space, argue Lunde and Helseth. Things like short squeezes, ETF news, and pressures from various sources have become the primary drivers of market trends. This shift is noticeable when looking at how bitcoin’s movements have become less connected to traditional indices like the S&P 500 and the DXY since the year began.

The U.S. Fed is set to announce its latest decision on interest rates today, with expectations of a pause at 5.5%. While there might be some short-term ups and downs during and after the meeting, Lunde and Helseth believe that any impact on the crypto markets will likely be brief. This is because the crypto market is now less influenced by traditional economic data, given its reduced correlation with conventional markets.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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