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▲ ‘Static market’ amid plummeting trading volume…Upbit market holding its breath. Bitcoin, XRP, and other major altcoins in a wait-and-see market/AI generated image ©
The New York stock market in the United States rose across the board as expectations of interest rate hikes receded due to worsening employment indicators, and the S&P 500 index hit an all-time high. In contrast, the domestic cryptocurrency market is showing a slight downward trend amid an extreme trading drought.
As of 8:20 AM on August 8 (Korean time), Bitcoin (BTC) was trading at 91,253,000 won, up 0.01% from the previous day, barely defending the 91 million won mark, according to Upbit, the largest cryptocurrency exchange in Korea. Despite the possibility of the Federal Reserve (Fed) freezing interest rates in September soaring to 56% in the New York stock market, reviving risk asset preference, no warmth is being conveyed to the domestic coin market.
The overall deterioration of investor sentiment in the market is clearly evident in the drought of trading volume for major coins. The Upbit Composite Index recorded a 0.28% decrease to 9,380.95, and the Altcoin Index fell 0.75% to 2,363.38. Trading volumes for top-tier market cap assets have sharply contracted, with Ethereum (ETH) down 0.30% to 2,695,000 won and XRP (Ripple) down 2.11% to 1,436 won. Bitcoin's 24-hour trading volume also remained at approximately 51.4 billion won, intensifying the liquidity depletion.
According to Upbit Datalab, Upbit's 24-hour trading volume slightly increased by 8.53% from the previous day, reaching 795.418 billion won. However, it still hasn't surpassed the '1 trillion won' mark, continuing the severe trading drought. The exchange has been successively introducing newly listed coins to combat the decline in trading volume, but it's proving insufficient. Although newly listed Blockstreet (BSB) rose by 6.85% and Camino Finance (KMNO) ranked high in trading volume today, they show limitations in boosting the overall market liquidity.
The reason the coin market is declining despite the stock market surge is that global macroeconomic tailwinds have failed to open the floodgates for funds to flow into the cryptocurrency market. As investors' funds are concentrated in traditional asset markets like stocks, new inflows into the cryptocurrency market have stagnated, and existing retail investors are adopting a strong wait-and-see attitude, leading to an abnormal short-term trading environment where only a select few altcoins experience sharp rises.
A somewhat cautious approach is also needed for future prospects. In a situation where trading volume shows a straw-like flow below 1 trillion won, even small selling volumes can significantly amplify volatility. Experts advise that it will take time for liquidity to recover before macroeconomic tailwinds fully impact the coin market, and conservative investments should be maintained until the trading volumes of domestic exchanges like Upbit clearly rebound.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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