Analysts said that the specifics of digital currencies, rather than macroeconomic factors, influence the direction of market movement
The 48% decline in digital asset trading volumes this September is attributed to a significant drop in activity on crypto platform Binance. This is according to a new report from K33 Research.
Average weekly spot BTC trading volumes on the exchange have fallen by 57% since the beginning of this month. At the same time, nothing has changed globally on other spot platforms, the experts noted.
They believe that the ongoing investigations by the US DOJ and SEC against Binance have probably deprived market makers of motivation to make transactions on this platform, which partially explains such a drop.
“Perhaps some of the market makers have left for other exchanges, but it is still safe to say that Binance’s problems are having a negative impact on market volumes,” the researchers said.
It was recently reported that the drop in fiat currency trading volume on the crypto exchange since January this year amounted to more than 60%. Cryptocurrency derivatives trading volume on Binance last month was down 22.5% compared to July.
K33 noted that the characteristics of cryptocurrencies are a determining factor for the direction of the crypto market this year. The reduction of short positions, information about ETFs, selling pressure amid bankruptcies and the policies of U.S. regulators towards the digital asset industry have had the most serious impact on the crypto market.
The 90-day correlation of the major cryptocurrency with the S&P 500 and DXY indices reaches 0.17 and -0.14, respectively. This is significantly lower than at the beginning of January 2023, when it was at 0.56 and -0.46, respectively.
“In the current environment, making trading decisions based on macroeconomic data becomes less appropriate due to bitcoin’s low correlation with traditional assets,” the researchers said.