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- Over the weekend, BTC fell to $41,158 and ETH fell below $2,200.
- The market was expected to move sideways until the end of the year.
Cryptocurrency trading activity cooled over the last non-holiday weekend of the year, the first possible sign that a 2023 peak may have been reached and the market will remain sideways until 2024.
Over the weekend, Bitcoin (BTC), the world’s largest cryptocurrency, fell below $42,000. The decline has accelerated over the past 24 hours, with BTC falling to $41,158 as of this writing, AMBCrypto discovered using data from CoinMarketCap.
Ethereum (ETH), the second-largest digital asset, fell below $2,200 as participants recorded gains before leaving for the festivities. ETH, which lost more than 2% in 24 hours, was trading at $2,172 at the time of press.
Decrease in trading activity
Bitcoin has led a broad market rally over the past two months, driven by enthusiasm over the approval of spot ETF applications in the US market.
Optimistic expectations led investors to build their portfolios with BTC, resulting in heightened trading activity.
However, AMBCrypto’s analysis of Santiment data shows that daily trading volume fell 60% last week.
Even whale investors, who typically take advantage of calm periods to accumulate assets, have dabbled in trading, as evidenced by the sharp decline in large transactions.
Source: Santiment
The amount of coins moving to exchanges also appeared to have decreased noticeably. From 45,269 BTC a week ago, exchange inflows plummeted to 15,675 BTC on December 17, a clear sign of declining trading activity.
Source: Santiment
The derivatives market is also quiet.
Speculative interest in KingCoin also began to fade as the end of the year approached. Open interest (OI) for BTC futures fell more than 9% from last week to $16.95 billion, AMBCrypto said using Coinglass data.
A decline in OI that coincides with a decline in market prices is generally viewed pessimistically by market experts. However, the current situation may be more of a year-end blip than a long-term trend.
Read Bitcoin (BTC) Price Prediction for 2023-24
Shivam Thakral, CEO of Indian cryptocurrency exchange BuyUcoin, weighed in on the market situation in a quote shared with AMBCrypto.
He pointed out:
“We expect trading activity to decline somewhat as the holiday season approaches, which may keep markets at current levels. The Bitcoin ETF approval clock is ticking, and once final approval occurs, we can expect a cryptocurrency supercycle in 2024.”