In the past two months, the cryptocurrency market has witnessed the rise of meme coins, marking the beginning of a new era characterized by low liquidity. Prominent digital assets have experienced a total liquidation of approximately $55 million, with Bitcoin and Ethereum leading the pack at $15.54 million and $14.77 million respectively. Consequently, the rest of the altcoin market reported around $25 million in liquidation, highlighting a significant decline in cryptocurrency traders.
Declining Trading Volume and Bitcoin’s Support Level
Simultaneously, the decline in cryptocurrency trading volume aligns with the Bitcoin price drop below the crucial support level of $27.5k. The Bitcoin bulls are now striving to maintain stability above the weekly 200 MA, drawing attention to the forthcoming FOMC meeting minutes scheduled for Wednesday. These minutes are anticipated to provide investors with valuable insights into economic and financial conditions.
Santiment On Crypto Trading Volumes
A recent report from the on-chain platform Santiment reveals a substantial decrease in cryptocurrency trading volumes since Bitcoin’s rebound in early March. Interestingly, the highly anticipated Ethereum Shanghai Upgrade on April 12 failed to ignite significant trading volume in the crypto ecosystem due to concerns over potential regulatory crackdowns in the United States.
A Look At History
Santiment’s report emphasizes that the largest crypto assets are currently experiencing historically low levels of weekly trading volume. In particular, altcoin volume has significantly dried up. When combining the trading volume of Bitcoin and Ethereum alone, this represents the second-lowest threshold observed since September 2019.
Future Outlook: Rebound Around The Corner?
Looking ahead, as Bitcoin’s halving approaches within a year, experts expect the cryptocurrency market to continue consolidating and trading in sync with the general market outlook. Consequently, crypto analysts predict a potential shakeout before a rebound, as concerns of an impending recession loom over the second half of 2023.