Posted:
- BTC fell to $41,158, while ETH fell below $2,200 over the weekend.
- The expectation was that the market would remain sideways until the end of the year.
Crypto trading activity cooled on the last non-holiday weekend of the year, the first possible sign that the 2023 peak may have been reached and the market will remain sideways until 2024 arrives.
This weekend, the world’s largest cryptocurrency, Bitcoin, emerged [BTC], dropped below $42,000. The decline accelerated in the past 24 hours, with BTC falling to $41,158 at the time of writing, AMBCrypto noted using CoinMarketCaps facts.
Ethereum [ETH], the second-largest digital asset, fell below $2,200 as participants posted gains before retreating for festivities. With losses of more than 2% in 24 hours, ETH was trading at $2,172 at press time.
Trading activity is declining
Bitcoin has led the broader market rally over the past two months, driven by enthusiasm over the adoption of spot ETF applications in the US market.
Bullish expectations led investors to stack their portfolios with BTCs, resulting in increased trading activity.
However, over the past week, daily trading volume fell by 60%, according to AMBCrypto’s analysis of Santiment data.
Even the whale investors, who generally use quieter periods for accumulation, stayed away from the trading, as evidenced by a sharp decline in the number of large trades.
Source: Santiment
The number of coins going to exchanges also saw a noticeable decline. From 45,269 BTCs a week earlier, inflows fell to 15,675 on December 17, a clear sign of declining trading activity.
Source: Santiment
The derivatives market is also becoming quiet
Speculative interest in the king’s coin also began to fade as the year drew to a close. The Open Interest (OI) in BTC futures fell by more than 9% from last week to $16.95 billion at the time of writing, AMBCrypto noted using Mint glass facts.
The decline in OI that coincides with the decline in market price is generally viewed with pessimism by market experts. However, the current situation could be an end-of-year trend rather than a long-term trend.
Read Bitcoin’s [BTC] Price forecast 2023-24
Shivam Thakral, CEO of Indian cryptocurrency exchange BuyUcoin, weighed in on the market situation in a quote shared with AMBCrypto.
He noticed,
“As we approach the holiday season, we can expect a dip in trading activity, which could allow the market to remain at current levels. The Bitcoin ETF approval clock is ticking and we can expect a crypto supercycle in 2024 once final approval is achieved.”