Cryptocurrency Trade Volumes Decline in a Bearish Trend

• Centralized crypto exchanges report a 19.3% decline in spot trading volumes, marking a new low since October 2020.
• Decentralized exchanges (DEXes) maintain consistent volumes while the broader crypto market remains stagnant.

The cryptocurrency market, renowned for its wild swings, is currently mired in a pronounced downturn. Centralized crypto exchanges are particularly feeling the pinch, with trading activity experiencing a notable contraction. This decline is not isolated but reflects the prevailing bearish sentiment in the market.

According to a meticulous report from industry publication Wu Blockchain on October 16th, spot trading volumes across major crypto exchanges plummeted by a staggering 19.3% on a month-on-month basis in September. This decline is the most significant since October 2020.

While the decrease in trading activity is widespread, some exchanges are feeling the impact more severely. KuCoin and Crypto.com, both significant players in the crypto arena, suffered substantial monthly trading volume losses of 32% and 31%, respectively. Even Binance, the crypto exchange giant, reported a trading volume contraction of nearly 30% in September, falling from $189 billion in August to $133 billion.

Huobi and OKx also saw their trading volumes drop by 25% and 21%, respectively, with Coinbase not far behind, recording a 20% decline. Collectively, the thirteen exchanges under scrutiny saw a 19.3% reduction in trading volume, decreasing from $406 billion in August to $328 billion in September.

The Impact on Crypto Derivatives

Crypto derivative trading wasn’t immune to this trend, with a holistic monthly contraction of about 15%, dropping from $1.9 billion to $1.6 billion in September. Notably, certain trading figures may be inflated due to practices like bot or wash trading.

Simultaneously, the web traffic to these crypto exchanges, a reflection of interest, also followed a bearish trend with an average decline of 17.4% in September.

In contrast, decentralized exchanges (DEXes), as reported by data aggregator DeFiLlama, maintained relatively consistent volumes in recent months, with weekly trading figures hovering around $11.7 billion. The global crypto market cap, according to CoinGecko, has remained at $1.12 trillion and has shown little movement over the past sixty days. Meanwhile, Bitcoin, after a brief surge, appears to be returning to its previous levels.