Cryptocurrency trading volume exceeded $1 trillion in January

The trading volume on centralized cryptocurrency exchanges in January has already exceeded $1 trillion. At the same time, the Bitcoin rate began to grow after the correction, breaking the level of $42 thousand. Experts believe that the correction was associated with an overheated market in anticipation of the approval of a Bitcoin ETF. After its completion, it is possible to restore the bullish trend with the potential for growth to local maximums – first to $50 thousand, and by the end of the year to $69 thousand.

According to The Block, trading volume on centralized cryptocurrency exchanges in January has already exceeded $1 trillion. This is happening for the second month in a row. Until recently, there was a correction in the cryptocurrency market, but now, according to CoinMarketCap, the cost of bitcoin has exceeded $42.3 thousand (an increase of 1.7% over the week). The rates of other cryptocurrencies, however, are still declining: Ethereum is trading at $2.2 thousand (a drop of 8%), XRP and Cardano are losing about 4%, Dogecoin has fallen in price by 8%, only Solana is growing by almost 6%.

Experts interviewed by Kommersant do not consider the correction a “bearish” trend. “The market lived in anticipation of the approval of a Bitcoin ETF, which eventually happened,” explains chief analyst at Cryptorg Andrey Podolyan. “However, the market turned out to be too overheated. Traders and funds pushed the price into strong overbought conditions even on the weekly time frame. The correction is natural.”

Last week, the Bitcoin rate dropped below $40 thousand due to sales in the Grayscale Bitcoin Trust, says BitRiver financial analyst Vladislav Antonov. However, the sell-off has now slowed, so the price “bounced off support at $38.5 thousand, rising above $42 thousand.”

The completion of the process of outflow of funds from the fund has eased the pressure on Bitcoin, returning optimism to many market participants, agrees the founder of Cross Finance, Alexander Mamasidikov.

In addition, according to Mr. Mamasidikov, after the fall of Bitcoin after the launch of trading in spot ETFs, “the cryptocurrency went into the oversold zone.” With the halving approaching, many market participants are waiting for favorable moments to enter, he believes. The expert added that Bitcoin’s drawdown closed the gap on the CME, “after such movements, as a rule, the asset demonstrates positive movement.”

The crypto market is under pressure and uncertainty associated with the rate of decline in the key rate in the United States, notes Anton Toroptsev, regional director of CommEX in Russia and the CIS. If a month ago most market participants expected that at the March meeting the Fed would decide to lower the key rate, now they do not feel such confidence due to the still high level of consumer price growth, the expert believes. “Previous growth drivers, such as waiting for the approval of a Bitcoin ETF and hopes for an imminent key rate cut, have exhausted themselves. In this situation, bearish sentiment has intensified, which does not allow Bitcoin to break through to the $50 thousand mark, which it was approaching in early January.”

At the same time, Bitcoin managed to gain a foothold above the “psychological resistance level of $40 thousand.” Against this background, and also taking into account that the flagship Bitcoin ETF has reached $2 billion in assets under management, Mr. Toroptsev sees prospects for “positive growth dynamics.” In his opinion, high trading volumes also indicate that cryptocurrencies are attracting growing interest from traders, “the last two months have been an active period for traders and speculators who have been intensively trading Bitcoin, taking advantage of its increased volatility.”

Andrey Podolyan, however, warns that “technically, the possibility of a correction to the area of ​​$37 thousand remains.” “Taking into account the pressure, a decline to the November 2023 trading zone is possible – to $35-37 thousand,” agrees Mr. Mamasidikov. He believes that “these levels will be actively repurchased.”

In general, volatility risks remain in the market due to the macroeconomic situation and the actions of the US Federal Reserve, emphasizes Vladislav Antonov. However, high trading volumes and activity in Bitcoin “speak of support from the crypto community,” the expert believes. “After the correction is completed, it is possible to restore the bullish trend with the potential for growth to local highs – first to $50 thousand and then to $69 thousand by the end of the year.”

Ksenia Kulikova