The crypto market in 2024 is experiencing a decline in trading volume, with an overall drop of 64% compared to the previous week, as reported by Santiment. This decrease is particularly evident among altcoins, which is not surprising given the holiday season and year-end financial adjustments that typically lead to reduced market activity. Despite the current lull, a potential market uptick could occur if whales continue to accumulate assets without the usual retail participation.
Traditionally, the end of December sees decreased trading activity across the crypto space, especially in sectors like meme coins, AI/Big Data projects, and Layer 1 and Layer 2 assets. The data chart from Santiment reveals that trading activity has reached its lowest level in seven weeks, signaling a cooling market after the surge in mid-November driven by external factors like political events and investor sentiment. Meme coins and Layer 2 assets saw the most significant drop in interest, while AI and Big Data projects followed a similar downward trajectory.
November was a standout month for the crypto market, with trading volumes reaching an all-time high of over $10 trillion in transactions, according to a Bloomberg report. This surge was fueled by optimism surrounding the newly elected Trump administration, which was expected to create a more favorable regulatory environment. Additionally, Bitcoin’s price surged by 38%, reaching $100,000, contributing to the overall increase in trading activity. Spot trading on centralized exchanges saw a 128% jump, while derivatives trading volume surged by 89%, hitting a record $6.99 trillion.
South Korean exchanges like Upbit experienced an increase in trading activity, with traders showing interest in altcoins. Institutional exchanges, such as the CME, also saw a record high volume of $245 billion in aggregate trading. However, despite the previous surge in activity, the current market is experiencing a decline in trading volume, indicating a return to a more stable condition after the earlier excitement.
In conclusion, the crypto market in 2024 is witnessing a decline in trading volume following a period of significant activity in November. While the current lull may continue due to the holiday season and year-end financial preparations, a potential market uptick could occur if whales continue to accumulate assets. The data from Santiment shows a decrease in trading activity across various sectors, with meme coins and Layer 2 assets experiencing the most significant drop in interest. Overall, the market is returning to a more stable condition after the surge driven by external factors in mid-November.
