Crypto Trading Sees Big Decline as the Year Ends: What’s Next?

• Crypto trading volume dropped 64% as the year ends, signaling a market slowdown.  
• November’s surge saw record volumes, driven by regulatory optimism and Bitcoin’s rise.  
• Reduced trading in sectors like meme coins and Layer 2 assets marks market cooling.

As 2024 draws to a close, the crypto market is experiencing a significant decline in trading volume, pointing to a shift in market dynamics. According to data from Santiment, the overall trading volume dropped by 64% over the past week compared to the previous week, marking an all-time high for Bitcoin.

This downturn, particularly among altcoins, is not entirely unexpected. The holiday season and traders organizing their finances for the year-end traditionally result in reduced market activity during this period.

Despite the lull, a sudden market uptick could occur if whales continue to accumulate assets without the usual retail participation. 

Further, the end of December is typically marked by decreased trading activity across the crypto space, particularly in sectors like meme coins, AI/Big Data projects, and Layer 1 and Layer 2 assets.

The data chart from Santiment highlights that trading activity has fallen to its lowest level in seven weeks, indicating that the market has cooled following its earlier surge in mid-November.

At that point, the trading volume surged due to external factors like political events and investor sentiment. However, that period has since faded, and the market is now returning to a more stable condition. Also, meme coins (green) and Layer 2 assets (blue) witnessed the highest drop in interest, while AI and Big Data projects (purple) followed a similar downward trajectory.

Read also: Crypto Market Stalls as Korean Trading Drops, U.S. Election in Focus

November’s Surging Volume and Its Impact

Despite the current decline, November was a standout month for the crypto market. According to a Bloomberg report, the crypto trading volumes soared to an all-time high of over $10 trillion in transactions.

This surge in activity was driven by optimism surrounding the newly elected Trump administration, which was considered to foster a friendlier regulatory environment. Further, Bitcoin’s price recorded a 38% increase, reaching $100,000, contributing to the overall surge in trading activity. 

Moreover, spot trading on centralized exchanges jumped to a 128% increase, reaching $3.43 trillion, the second-highest figure since May 2021 and the derivatives trading volume surged by 89%, hitting a record $6.99 trillion, surpassing its previous highs.

Notably, South Korean exchanges like Upbit saw an increase in their trading activity, with traders flocking to altcoins, followed by institutional exchanges, like the CME, witnessing an all-time high volume, with a record of $245 billion in aggregate trading.