Crypto Trading Slumps in December 2022

Crypto Trading Slumps in December 2022

The cryptocurrency market experienced a significant drop in trading activity throughout December 2022. Compared to previous months, daily volumes witnessed a substantial decline, with figures from January 1st, 2023, showing a mere $22.95 billion traded – half the volume recorded just two weeks prior.

This trend extends beyond daily figures. December's total trade volume fell nearly 47% compared to November 2022. It's worth noting that November saw a temporary spike in activity due to the FTX collapse. Even when compared to December 2020, the most recent December marks the lowest point for global cryptocurrency trade volume in two years.
While the exact reasons behind the decline remain unclear, it could be attributed to factors such as waning investor interest or a lack of selling pressure within the market.
Interestingly, data from January 1st, 2023, reveals that over 70% of all trades involved stablecoins, with Tether (USDT) dominating the market. Stablecoins are cryptocurrencies pegged to traditional assets like the US dollar, offering price stability in a typically volatile market.
The implications of low trade volume for investors are complex. On one hand, it can signify a lack of market enthusiasm, potentially leading to a decrease in cryptocurrency values. However, it could also indicate limited selling pressure, which some view as a bullish sign for the future of the cryptocurrency market.

References

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