8 сентября, 2020
During August, the crypto markets saw some volatility. While Bitcoin (BTC) was fundamentally stable between 11,000 USD and 12,000 USD, smaller altcoins saw tremendous turbulence, with the development of the DeFi industry driving numerous of them to see parabolic momentum.
Ethereum (ETH) played a massive role in this, as the demand for the blockchain’s system had an underlying influence that positively affected its price. Eventually, ETH surged as high as 490 USD before it lost its momentum and fell to lows of 320 USD.
The whole market has been hit by inflows of selling pressure in the last few weeks, which have caused numerous altcoins to post huge losses.
That being said, information surrounding capital inflows into the crypto market clarifies that investors have been flocking into the market.
The major exchanges saw trading volumes spike by nearly 60 percent in August, while the smaller exchanges that offer access to smaller and more speculative altcoins saw a 30 percent increase in volume.
It is essential to take note that institutional trading volumes rose too, with Chicago Mercantile Exchange (CME) futures contract trading activity increasing by over 36 percent.
Crypto Market Hit by Volatility As Upturn Halts.
Over the past few days, the strong upturn that was previously directing the whole market upward started to slow down.
BTC, which topped out with highs of 12,200 USD last week, has since dropped significantly lower, being unable to gain any clear buying pressure.
With the fall in BTC, we saw a lot of Altcoins being hit hard, with several dropping by as much as 50 percent.
ETH has continued to fall, as the cryptocurrency dropped from highs of 490 USD to lows of 320 USD. This sharp downward trend created a headwind that has seriously damaged the strength of the collective market.
Exchanges See Huge Volume Increases in August.
According to a recent article from CryptoCompare, the crypto market has seen an enormous increase in capital from new and existing traders alike.
This was illustrated by the 58.3 percent spike in trading volume that the major exchanges witnessed.
The article revealed that “In August, Top-Tier volumes increased 58.3 percent to 529 billion USD while Lower-Tier volumes increased 30.2 percent to 291 billion USD. Top-Tier exchanges now represent 64% of total volume (vs 60% in July).”
Image Courtesy of CryptoCompare.
In addition, the institutional trading volumes on the CME also saw increases. The article shows that a total of 203,867 BTC contracts were traded in August, denoting a 36.3 percent increase from July.
“Monthly CME futures contract volumes have increased by 36.3 percent since July to reach 203,867 contracts traded in August.”
This is a good sign for the crypto world, as it highlights that new capital was flooding into the market throughout the past few weeks.
That being said, it is important that BTC keeps above 10,000 USD mark and provides the collective market with space to rally further for this capital to keep feeding the fire driving this recent upward trend.
Fundamental Analyst for Global Markets
James has over 20 years of experience trading FX, cryptocurrencies and investments products for a range of investment banks and brokers
He spent the last 10 years analyzing and writing about foreign exchange, crypto-currencies and the global financial markets
He has also spoken at a range of conferences around the globe on various financial topics.