Binance FUD Leads To Drop In Bitcoin Volume, Other Exchanges See 52% Rise
Data shows the Bitcoin trading volume on Binance has seen a decline recently as FUD around the exchange has spread, while activity has picked up on other platforms.
Spot Market Excluding Binance Saw A 52% Rise In Bitcoin Trading Volume Last Week
As per data from this week’s Arcane Research report, the 7-day average volume is now around $757 million on exchanges other than Binance. The relevant metric here is the “daily trading volume,” which measures the total amount of Bitcoin being transacted on the Bitwise 10 exchanges on any given day.
The Bitwise 10 exchanges are obviously not all the exchanges there are in the sector, but data from them is considered the most reliable out of the existing platforms, and the trend in their volumes can also be taken as a decent approximation for the entire spot market.
When the daily trading volume has a high value, it means a large amount of movement is taking place in spot exchanges right now, suggesting that traders are active in the market. On the other hand, low values imply BTC isn’t observing much trading activity at the moment.
Here is a chart that shows the trend in the 7-day average Bitcoin daily trading volume over the past year:
Looks like Binance still occupies an extremely large share of the total volumes | Source: Arcane Research's Ahead of the Curve - December 20
As you can see in the graph, the data for the 7-day average Bitcoin trading volumes on Binance and that on the other exchanges are separately shown. The reason behind this is that following Binance’s fee removal, a large amount of wash trading started to take place on the platform as high-volume trading strategies became viable. Because of this, the crypto exchange was able to get an extraordinarily large share of the total volumes for itself.
Just one week ago, 91.5% of the spot volume was dominated by Binance. However, since then the exchange has seen a decline in its activity as controversies like the Proof-of-Reserves situation have seeded FUD in the minds of the investors. Now, the dominance of the exchange is around 88.7%.
While the volume on Binance has gone down, the rest of the market has seen an uptick of 52%, as the 7-day average value of the metric is now $757 million on these exchanges (up from $498 million last week), the highest since Nov. 19.
At the time of writing, Bitcoin’s price floats around $16,800, down 6% in the last week.
The value of the crypto seems to have been consolidating sideways recently | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Arcane Research
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