Bitcoin (BTC) and altcoin spot trading volumes have shown a significant decline as crypto prices have entered a correction phase over the past two months. A recent report from analytics firm CryptoQuant highlights that traders are increasingly favoring the crypto exchange Binance during this turbulent period.
According to the report, overall bitcoin spot trading volume on crypto exchanges plummeted from a peak of $44 billion on February 3 to just $10 billion by the end of the first quarter, representing a staggering 77% drop. Concurrently, total altcoin spot trading volume also experienced a steep decline, falling from $122 billion on February 3 to only $23 billion at the end of the quarter — a reduction of more than 80%.
This dramatic decrease in trading volume indicates that traders and investors might be losing interest or confidence in the market, potentially driven by a prevailing sense of uncertainty or fear. As prices taper off, diminishing the value of Bitcoin and other cryptocurrencies, the market can fall into a vicious cycle where reduced trading activity correlates with lowered prices.
Market’s Loss is Binance’s Gain
While the overall trading volumes decline, Binance has managed to widen its dominance in the crypto exchange landscape. The platform’s share of total market trading has surged to nearly 50%. In particular, Binance’s proportion of total daily Bitcoin spot trading volume rose from 33% on February 3 to 49% by the close of the first quarter.
This trend implies that other exchanges have experienced a more rapid decline in trading volumes compared to Binance, confirming its position as the leading liquidity venue during periods of heightened market volatility.
The exchange has also strengthened its hold on altcoin trading, with its share of total daily altcoin spot trading volume increasing from 38% on February 3 to 44% by the end of the first quarter.
Notably, certain altcoins, including BNB, TON, and EOS, continue to witness relatively high trading volumes on Binance, even as the overall market experiences a slowdown.
More recently, there has been a notable uptick in Bitcoin inflows to Binance. Independent analyst Martuun from CryptoQuant reports that the Bitcoin reserve on Binance has escalated from 568,768 BTC on March 28 to 590,874 BTC by April 9, reflecting an increase of 22,106 BTC. “This strong acceleration in BTC inflows to Binance suggests that investors may be moving their funds to the platform due to macroeconomic uncertainties and in anticipation of the upcoming Consumer Price Index (CPI) announcement,” he noted.
In summary, while the crypto market faces significant challenges and obstructions, Binance’s growing market share reveals its resilience as traders seek reliable platforms amidst volatility. Understanding these trends will be crucial for future trading strategies and investment decisions.
