The digital currency markets have fallen significantly in value during the past two weeks and the low prices have not driven the high trading volume. Data shows cryptocurrency spot market volume declined from $1.4 trillion in November 2021 to $593 billion in volume this month. Bitcoin futures open interest and volume have also declined significantly over the past two months.
Crypto Volumes Month-on-Month Slide from November
When crypto markets shed significant value, traders usually watch to see if trading volume increases to support the current prices. As many coins tapped all-time high prices during the second week of November, the crypto spot market volume continues to decline.
Data from theblockcrypto.com’s Exchange Volume Dashboard, which sources data from CryptoCompare.com Metrics, indicates that spot market volume has fallen month-on-month since November.
In November where $1.4 trillion was recorded, in December $1.04 trillion was recorded. While the data for the month of January 2022 is incomplete, an amount of $593 billion has been settled so far.
Even though November’s spot market volume was larger than the three weeks of December and January, the $2.23 trillion in volume recorded in May 2021 was more than double the size. Daily exchange volume follows the same pattern as daily crypto trading volume is lower than it was two months ago.
On November 2, 2021, $53.27 billion was settled that day, while data for January 22, 2022 shows that $24.65 billion. While monthly and daily crypto-asset spot market volumes have declined, the same can be said for derivatives markets such as futures and options.
When BTC tapped an all-time high on November 10, 2021, a record $28 billion in bitcoin futures open interest was generated the following day. Metrics for January 22 indicated that $14.64 billion was recorded in open interest across multiple bitcoin futures exchanges.
With regard to bitcoin futures volumes, they were higher in October than in November. Last October, $1.94 trillion was recorded and this month, only $1.08 trillion has been recorded so far. The total open interest and volume associated with bitcoin options also declined month-on-month over the past two months.
For the most part, low volumes in the crypto spot market and derivatives have negatively affected the crypto economy. Up volume usually indicates bullish trading, but this has not been the case in recent times.
What do you think about the drop in volumes in the crypto markets in the recent past? Let us know what you think about this topic in the comment section below.
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