While bitcoin recovered in terms of appreciation in the market, in July its trade fell. During this month, the volume of purchases and sales in the spot markets (spot) fell to 31.5% compared to the previous period, reveals a report published by CryptoCompare.
According to data from the same source, bitcoin spot trading last month encompassed a volume of $ 1.9 trillion. That level, the source says , is the lowest for any month this year 2021 .
CryptoCompare adds that the exchanges they classify as top tier, together moved 90% of the total volume . The corresponding drop for these exchange sites, among which Binance stands out, was 30.7%. Lower tier exchanges had a more drastic drop in their volumes: 37.8%.
July 26 saw the highest daily volume of the month (above $ 98 billion), coinciding with a rally that took BTC above $ 38,000 for the first time since mid-June. Despite that, the total trade volume for the month did not rebound. In addition, that maximum was almost 30% below the June maximum (more than 130,000 million dollars) .
Low volumes, bitcoins off the exchanges
This information on trader behavior is also supported by another report focused on bitcoin market activity from last month. Kaiko, another research firm dedicated to the world of cryptocurrencies, assured in its report for that period that trade had a rebound towards the end of the month .
Trade volumes saw a brief increase in the last week of July, but are still lower than during the spring bull run.
To get an idea of the gap, this year’s trading cap for one day came in May, in the midst of the bitcoin price drop. According to Kaiko’s records, on the 19th of that month alone, more than 30,000 million dollars in bitcoin trade moved in the market . In a chart that spans from May to July, it can be seen that the highest figure for a day in the last month is just a third of the maximum in May.
This behavior in the market, detected in both reports, seems to support information reported in CriptoNoticias this Thursday, August 5: in July there was an exodus of bitcoins from exchanges, with more than 100,000 being withdrawn daily towards the end of the month , according to data from Glassnode.
Bitcoin derivatives gain ground in the market
Despite falling volumes, bitcoin derivatives trading gained traction in the market. In July, derivatives also saw a volume slump of more than 20%, according to CryptoCompare. Even so, some 2.5 trillion dollars were moved in this way and derivatives increased their share in the global market.
Before last month, derivatives accounted for just over 52% of the market, the researchers note. But at the end of July, that market share was almost 57% of the more than 4 trillion dollars moved in total , as shown in a graph that we reproduce below:
The derivatives market accounts for more than half of total trade. Source: CryptoCompare.
Of that percentage, the majority belongs to Binance, a platform on which $ 1.4 trillion in derivatives were traded throughout July. OKEx, BiBit and FTX, the trendy derivatives exchange , followed on that list.
In addition to trading volumes, open interest increased after it fell in June, which completes the outlook for growth in the derivatives market in July.
Open interest translates into buy and sell positions that remain active in the negotiation of a security contract. In this case, bitcoin. Commonly, a high open interest is associated with a bullish moment in the market.
That increase, although slight, was manifested in the large derivatives exchanges . Binance not only maintained the highest volume of open interest, but its increase was percentage greater than that seen in exchanges such as OKEx, Bibit, Deribit or Huobi .
Bitcoin no longer keeps pace with dollar inflation
The aforementioned Kaiko report also covers other topics related to the bitcoin market in the past month. One of them is the correlation between the crypto asset and dollar inflation.
Although the rise in the price of bitcoin has historically been associated with dollar inflation rates, that trend appears to have reversed in recent months. The Kaiko researchers highlighted in their report that instead of rising, the cryptocurrency fell just after reports of rising US inflation emerged .
However, towards the end of July the main cryptocurrency began its rebound and closed the month at around $ 40,000. At the time of writing, the price of BTC is already over $ 42,000 , as shown by the CryptoNews price calculator .
Meanwhile, concerns about these inflationary indices (in June it increased 5.4% compared to the same month of 2020) are growing, to the point of “feeding the fear that the recovery [from the onslaught of the pandemic in the economies] it may be slower than expected. ‘
Stablecoins on the rise (even those of the euro)
The dollar, meanwhile, continues to lose strength. In parallel, stablecoins ( cryptocurrencies that replicate the price of national currencies such as the dollar) have exponentially gained ground .
The research cites the existence of close to 3,000 instruments that use the dollar tether (USDT) or USD Coin (USDC) in exchanges, with a clear predominance of the former, but a sustained increase in the latter .
Furthermore, Kaiko notes that stablecoins that replicate the value of the euro have also been gaining notoriety in recent times. While this terrain is largely dominated by dollar-based currencies, trading volumes with euro- pegged currencies have been increasing , also dominated by tether (EURT), as can be seen from Bitfinex data shared in the report.
In an increasingly digitized or digitizing economy in various parts of the world, the increasing use of stablecoins is not surprising . In the case of the cryptocurrency market, they allow you to operate quickly on exchange platforms, as well as being a vehicle to avoid volatility.
This growth has not gone unnoticed, as we have previously reviewed in this newspaper. Kaiko claims, in fact, that the increase in popularity of these coins has been accompanied by great regulatory interest on the part of governments, as the United States has already shown .