A recent report from Matrixport highlights the challenging phase confronting the altcoin market, particularly underscored by the notable decline in trading volumes on Upbit, South Korea’s largest cryptocurrency exchange. This downturn is instilling skepticism about the continuous surge of alternative cryptocurrencies.
Sharp Decrease in Trading Volume
Upbit has witnessed a significant drop in its 24-hour trading volume. From its peak of $15 billion on March 5, the volume has plummeted by 75% to $3.79 billion.
This decline marks a substantial deviation from the positive trajectory observed earlier in March.The period of reduced trading volume indicates a general cooling of the altcoin market.
Previously, the altcoin space experienced significant interest and investment, buoyed by events such as the Ethereum Dencun upgrade and the prevailing optimism in the crypto market ahead of the Bitcoin halving.
Plummet in Altcoins Trading Volume
The dwindling trading volume also reverberates across the broader cryptocurrency market, particularly impacting altcoins. During the initial surge in March, the total capitalization of altcoins peaked at $788 billion, reaching its highest level in two years.
This stabilization coincides with the decline in trading volumes, raising questions about the future market valuations of the altcoin sector, according to the report.
Upbit boasts a diverse portfolio, encompassing 192 cryptocurrencies and 309 trading pairs, indicative of broad interest in various altcoins.
The recent downturn suggests a potential shift in investor behavior, possibly moving away from the high-risk, high-reward strategy favored by altcoin traders.
Altered Investment Trends
An analysis of Upbit’s trading patterns reveals a distinct focus among South Korean investors.
Unlike many other platforms where trading is predominantly dominated by Bitcoin (BTC) and Ethereum (ETH), Upbit’s trading activity is more evenly spread across multiple altcoins.However, with the current economic downturn, this scenario might be evolving.
Presently, BTC and ETH trading pairs represent just over 9% of Upbit’s entire
24-hour trading volume, with the remainder attributed to altcoin-fiat trading pairs.This shift could indicate a change in investors’ strategy, potentially towards a more cautious approach amidst market uncertainty.
Nonetheless, the allure of altcoins, driven by expectations of substantial profits, may not wane entirely, albeit tempered by a reconsideration of risks in the prevailing economic and political landscape.
Get free access to our lifetime VIP membership. Join us here.
Leave a Reply