• Mon. Mar 4th, 2024

Low Volumes in Futures & Spot Market Trading Stamp Bearish Market Ahead

Jan 26, 2022

Overall shrinking of the crypto economy is causing huge adverse and damaging impacts upon crypto open interest in Bitcoin futures and spot market trading. Since November 2021, volume for spot markets has reduced from US$ 1.4 Trillion to US$ 593 Billion. Similarly, interest in futures is dropping sharply from November 2021’s US$ 28 Billion to US$ 14.64 to date. Any additional reduction in the global crypto economy would further damage the two crypto markets while a bearish market for the future is stamped.

The Crypto market is moving ahead in a manner that was not expected by the majority of crypto supporters. On the contrary, supporters were expecting quick surges in the values of cryptocurrencies, which did not happen at all. Instead, the market is reduced to nearly half of its value prior to 15th November 2021. A major downfall has been witnessed in the market for the past two weeks. This resulted in the shrinkage of the global crypto economy to US$ 1.6 Trillion only, which was otherwise exceeding roughly US$ 3 Trillion.

The shrinkage of the global crypto economy has also severely damaged open interest in Bitcoin futures as well as to the crypto spot market.

It has been noted that firstly the volume in the crypto spot market has been continuously going down miserably since November 2021 to date. For instance, the crypto spot market saw a volume of US$ 1.4 Trillion in the month of November last year. However, in the month of December, the volume dropped at the level of US$ 1.04 Trillion. It continued to drop sharply in January 2022 and to date, it has dropped to an alarming level of US$ 593 Billion in total. The highest volume seen for the crypto sports market was in the month of May 2021. At that time, the volume went up to the level of US$ 2.23 Trillion which was the all-time best. Even though November’s volume was also promising yet considering May 2021’s volume, November’s volume was still 50% less than that.

Similarly, there is nothing good happening in the crypto derivatives markets. For instance, options and futures trading is gradually decreasing. For instance, on 10th November 2021, Bitcoin future exchanges recorded open interest of US$ 28 Billion for the future. As of today, however, the interest has declined to US$ 14.64 Billion only.

In addition, volume for Bitcoin future was at its highest in the tenth and eleventh months of 2021. At that time, the volume was over and above US$ 1.9 Trillion but today, the volume is slightly above US$ 1 Trillion.

It can easily be ascertained that the declining market is because of the shrinking of the crypto economy. Bitcoin was being sold for US$ 68,000 on 10th November 2021, which was its highest value ever. On that very day, Bitcoin even went on touching US$ 69,000 plus, however, the day trading closed at US$ 68,000.

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