Spot trading shrinking despite Bitcoin (BTC) rebound… signal of slowing market participation
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- Bitcoin (BTC) is showing a price rebound, but spot trading volume has reportedly shrunk significantly, with market liquidity at its lowest level since November 2023.
- It reported that despite price increases, the accompanying decline in spot trading volume raises uncertainty over the continuation of the bull market, and that correction risk could increase if volatility expands.
- CoinDesk explained that whether spot trading volumes recover will be a key indicator for assessing the persistence of trends in Bitcoin and the crypto market going forward.
- The article was summarized using an artificial intelligence-based language model.
- Due to the nature of the technology, key content in the text may be excluded or different from the facts.
Bitcoin (BTC) has recovered to the $94,000 level and is showing a rebound, but trading activity in the crypto spot market has appeared to shrink.
Contrary to Bitcoin regaining vitality in terms of price, spot trading volume has fallen to its lowest level since November 2023, raising concerns about a slowdown in market participation.
On the 5th (local time), crypto-focused media CoinDesk, citing Glassnode data, reported that recent crypto spot trading volume has entered a long-term low range. According to the outlet, spot trading volumes for Bitcoin and major altcoins have all decreased together, leaving overall market liquidity low.
Analysts say this suggests that warnings about liquidity shortages raised after the large-scale liquidations in October last year are coming to fruition. Although leverage trading has partly recovered after the sharp volatility at that time, actual trading participation in the spot market has continued to be limited.
The outlet explained that a situation in which spot trading volume does not support price increases is generally interpreted as a signal that the sustainability of a bull market is weak. It means that if prices rise on a weak demand base, the risk of corrections can increase when volatility expands.
Some in the market have raised the possibility that changes in an institution-centered trading structure have also affected the decrease in spot trading. As indirect investment through Bitcoin spot ETFs has expanded, trading volumes within traditional spot exchanges may have relatively declined, analysts say.
CoinDesk added that whether spot trading volumes recover will be a key indicator for judging the persistence of trends in Bitcoin and the crypto market going forward.
