Crypto: Spot Crypto Volumes Plunge To 2024 Lows Amid Investor Demand Weakens

Spot crypto trading volumes have fallen by half since October as liquidity dried up and investor engagement weakened.

Spot crypto trading volumes on major exchanges have fallen from around $2 trillion in October to $1 trillion at the end of January, indicating “clear disengagement from investors” and weaker demand, according to analysts.

Bitcoin (BTC) is currently down 37.5% from its October peak amid a liquidity drought and a major bout of risk aversion, causing volumes to contract.

“Spot demand is drying up,” said CryptoQuant analyst Darkfost on Monday, adding that the correction “has been largely driven by the Oct. 10 liquidation event.”

Since October, crypto spot volumes on major exchanges have halved, according to CryptoQuant. Binance, for example, saw $200 billion in Bitcoin volume in October, and that has now fallen to around $104 billion.

However, this is not the only factor at play, they said.

Market liquidity is also under pressure, as reflected by stablecoin outflows from exchanges and around $10 billion in stablecoin market cap declines, they added.

Justin d'Anethan, head of research at Arctic Digital, told Cointelegraph that the biggest short-term risks for BTC over the next few months look macro-driven.

“Uncertainty around Kevin Warsh’s hawkish stance as Fed chair could mean fewer or slower rate cuts, a stronger dollar, and higher real yields, which all pressure risk assets, including crypto,” he said.

Related: Crypto selloff is likely due to US liquidity drought: Analyst

Source: CoinTelegraph