The global cryptocurrency market is once again mired in a slump. Spot trading volumes have plummeted this quarter, and Bitfinex has analyzed the situation as reminiscent of a traditional "slump."
Bitfinex announced on the 8th (local time) through social media X (formerly Twitter) that its cryptocurrency spot trading volume for the quarter had decreased by 66% compared to its peak in early January. This is analyzed to be the result of the market adopting a wait-and-see attitude amid slowing exchange-traded fund (ETF) inflows and global macroeconomic uncertainty.
According to CoinMarketCap data, total cryptocurrency spot trading volume was around $500 billion (approximately 738 trillion won) in early November, but as of this week, it had fallen below $250 billion (approximately 369 trillion won). It briefly surpassed $550 billion (approximately 811 trillion won) in mid-November, but then quickly declined.
Trading volume hovered between $300 billion and $350 billion (approximately KRW 443 trillion to KRW 517 trillion) from late November to early December, with some trading days reaching as low as $200 billion (approximately KRW 295 trillion). This represents a low level not seen in recent months.
Bitfinex explained, "This type of trading slump has been repeated in previous market cycles. Such corrections are usually interpreted as a precursor to the next bull market." In other words, the current downturn could be a temporary correction.
Investors are still closely monitoring US interest rate trends and ETF inflows, and are likely to adopt a cautious stance until a clear direction emerges. Amidst this, there are expectations that a resurgence in institutional-led ETF flows could serve as a decisive catalyst for a recovery in trading volume.
๐ Market Interpretation
The cryptocurrency market has entered a period of adjustment amid slowing ETF inflows and macroeconomic uncertainty. Declining spot trading volumes are often seen as a harbinger of the next bull cycle, and the market has adopted a cautious wait-and-see approach.
๐ก Strategy Points
Rather than focusing on short-term trading volume fluctuations, attention should be paid to medium- to long-term trends. ETF-related movements and U.S. interest rate policy are key variables. If these indicators show signs of recovery, the likelihood of a market rebound could increase.
๐ Glossary
- Spot Trading: A trading method that involves buying and selling real assets (cryptocurrencies) in real time, rather than derivatives.
- ETF (Exchange Traded Fund): A fund listed on an exchange. Bitcoin ETF refers to a product that tracks the price of Bitcoin.
- Adjustment period: A period in which a temporary decrease in trading volume and price decline follows a previous upward trend.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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