Although cryptocurrency prices decreased last month, trading activity on centralized exchanges experienced a rise.
According to data from centralized crypto exchanges, there was a 30% increase in trading volume month-on-month in August, despite Bitcoin (BTC) and other digital currencies facing a significant downturn. Historically, August and September tend to be bearish for crypto, yet lower prices do not always correlate with diminished trading activity, as the statistics indicate.
Leading the major centralized exchange (CEX) sector were Binance and Bybit, with trading volumes increasing by 35% and 41%, respectively. Conversely, KuCoin, Crypto.com, and MEXC outpaced the larger exchanges. Spot trading volumes on these three platforms surged by 171%, 79%, and 44%, respectively, as investors adjusted their assets and blockchain-based portfolios.
In contrast, Gate experienced a 44% drop in activity, while Justin Sun-supported HTX and South Korean powerhouse Upbit registered the smallest volume increases.
The reason behind the surge in CEX volumes during a price decline
As reported by crypto.news, part of August’s CEX activity included billions in Bitcoin withdrawals from platforms like Binance and Coinbase. Investors pulling funds from crypto exchanges might be interpreted as a bullish signal.
The rise in CEX spot trading volume likely indicates positive sentiment among digital asset investors. Officials from the U.S. Federal Reserve appeared ready to implement interest rate cuts before the end of the month, pending no significant shifts or hawkish economic reports.
Lower interest rates could encourage investors to take on more debt and channel funds into assets as their risk tolerance improves.
Nic Puckrin, CEO of CoinBureau, shared via email with crypto.news that the enhanced liquidity could result in price increases for Bitcoin and other cryptocurrencies. Puckrin suggested that Bitcoin will likely pave the way, while altcoins such as Ethereum (ETH) might continue to lag behind BTC. Bitcoin whales have begun accumulating ahead of the anticipated Fed rate adjustments.
I believe the current market is set for a softer September. I foresee Bitcoin maintaining range-bound trading in the upcoming weeks. Altcoins are likely to decline relative to Bitcoin, leading to an increase in Bitcoin dominance.
