Trading volume on centralized exchanges experienced a significant decline of 21.8% in June, marking the third consecutive month of diminishing activity since March. A report by CCData revealed that the combined spot and derivatives trading volume across these platforms amounted to $4.2 trillion, a sharp drop from the peak of $9 trillion recorded earlier in the year. One of the key factors contributing to this decline was a notable decrease in open interest in derivatives exchanges. In June, open interest on these exchanges fell by 9.67% to $47.11 billion, with Coinbase experiencing a significant decline of 52.1% to $18.2 million. This trend was largely attributed to a series of liquidations triggered by a drop in cryptocurrency prices throughout June and into July.
Analysts identified selling pressures from various sources as additional factors contributing to the decline in trading volume. The aftermath of Mt. Gox repayments and Bitcoin sales by the German government were cited as some of the external pressures affecting the market. The futures market on the Chicago Mercantile Exchange (CME), known as the world’s largest institutional derivatives exchange, also saw a notable decline. Following a strong performance in May, trading volume fell by 11.5% to $103 billion in June, reflecting decreased interest in futures contracts for major cryptocurrencies like Bitcoin and Ethereum.
Over the past six months, there have been noticeable shifts in market share among centralized exchanges. Dubai-based exchange Bybit increased its market share by 2.01% to 8%, while Singapore-based BitGet and HTX saw gains of 1.74% and 1.43%, respectively. On the other hand, Binance saw its market share decline from 40.4% in July 2023 to 31.2% in June 2024, marking a significant decrease of 9.16%. These changes in market share are indicative of the evolving landscape of centralized exchanges and the competition in the market.
Stabilization of Average Funding Rates
Despite the overall decline in trading volume, average funding rates across the four analyzed exchanges showed signs of stabilization. These rates rebounded from the negative figures observed in the previous month, indicating a potential shift in market sentiment. However, it remains to be seen whether this stabilization will sustain in the coming months amidst the ongoing fluctuations in the cryptocurrency market.
The decline in trading volume on centralized exchanges can be attributed to a combination of factors, including decreases in open interest, external selling pressures, and shifts in market share among exchanges. As the cryptocurrency market continues to evolve, it is essential for traders and investors to stay informed about these key factors shaping the market dynamics.
Leave a Reply