May’s Crypto Market: Centralized Exchange Declining Volumes Hint at Bigger Changes Ahead

Trading volume on centralized cryptocurrency exchanges has decreased noticeably, falling to $5.27 trillion in May 2024. This decline, approximately 20.1% from the previous month, marks a continued bearish trend following activity Moderation of Bitcoin prices after its April Halving.

Cryptocurrency exchange landscape and institutional interest

According to CCData reports, this slowdown affects both the spot and derivatives markets. Spot trading decreased by 21.6% to $1.57 trillion. The drop was slightly less pronounced, at 19.4% on the derivatives front, for a total of $3.69 trillion.

Centralized crypto exchange metric. | Fountain: CC data

Despite the overall decline, derivatives trading claimed greater market share, a shift attributed to the U.S. Security and Exchange Commission's (SEC) unexpected endorsement of spot exchange-traded funds (ETFs). of Ethereum. This support caused a 50.3% increase in Ethereum derivatives open interest to $14 billion.

In terms of market presence, Bybit reached a record spot market share of 7.36%, even as its trading volume contracted by 12.7%. Binance, maintaining its lead, captured a 34.6% share of the spot market.

In the derivatives sector, Binance also increased its dominance to 45.4%, with competitors OKX and Bitget also owning substantial shares.

Meanwhile, the US CME exchange showed mixed results; While its overall derivatives volume retreated, ETH futures and options soared, reaching all-time highs of $20.5 billion and $931 million, respectively. This rally suggests growing institutional fascination, particularly following regulatory developments.

The trading outlook in May also reflected a reactive adjustment to regulatory developments, particularly the SEC's approval of detect Ethereum ETF—A decision that momentarily increased commercial activities.

Bitcoinist, citing the CryptoQuant report, recently reported that such regulatory deals often lead to speculative trading, evident from major exits from large exchanges like Coinbase and Kraken.

Continued outflows indicate bullish sentiment

Recent reports reveal that on-chain data has detected a significant amount of Bitcoin Departures of Coinbase, suggesting possible large-scale acquisitions. According to a CryptoQuant Quicktake analysis, Coinbase has experienced major exits for the seventh time this year.

The "currency outflow" metric, which measures the volume of Bitcoin withdrawn from currency portfolios, indicates that investors are withdrawing their assets to hold them for the long term, suggesting strong bullish sentiment.

These moves are not limited to Coinbase; Kraken has also seen major exitsrecording the largest movement of Bitcoin and Ethereum since 2017.

This pattern underscores broader market behavior in which large holders shift from short-term trading to permanently securing their assets. These strategic withdrawals often indicate a positive outlook for future price appreciation, reflecting investor confidence in the lasting value of cryptocurrencies.

Global Crypto Market Capitalization on TradingView
The capitalization value of the global digital currency market on the 1-day chart. Source: TOTAL Crypto market capitalization in TradingView.com

Featured image created with DALL-E, TradingView chart


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