Frozen Upbit, Trading Volume Plunges 34%... Is This the Bottom?

▲ Upbit / AI-generated image ©

As the US New York stock market closed lower, primarily in tech stocks, weighed down by fundamental concerns of leading artificial intelligence (AI) stocks and sticky inflation fears, Upbit, the largest virtual asset exchange in Korea, is also facing severe repercussions. With major coins plummeting across the board and trading volumes sharply decreasing amidst strong wait-and-see sentiment, a cold wind is blowing through the market.

As of 6:42 AM on the 29th, in Upbit's KRW market, the leading cryptocurrency Bitcoin (BTC) is trading at 113.56 million KRW, down 1.54% from the previous day, unable to escape its weakness. The leading altcoin Ethereum (ETH) is down 0.84% to 3.405 million KRW. XRP (Ripple) fell 1.72% to 2,052 KRW, and Solana (SOL) dropped 1.50% to 124,500 KRW, with most of the top market cap cryptocurrencies showing red.

The market's extreme wait-and-see attitude is clearly evident in the shrunken trading volume. According to data from CoinGecko, a global virtual asset market aggregator, Upbit's 24-hour trading volume at the same time plummeted by a significant 34.8% from the previous day, reaching only about $1.08215 billion. While major coins have lost direction and are hunkered down, speculative funds are flocking to specific assets, leading to a distinct altcoin selection phase in Upbit's KRW market, with Bioprotocol (BIO) showing gains in the 26% range, Pearl (PRL) in the 10% range, and Orca (ORCA) in the 6% range.

This sharp decline in Upbit's market and the contraction of investor sentiment align with the negative factors that hit the New York stock market overnight. News that OpenAI, the developer of ChatGPT, failed to meet new user and revenue targets, and that internal concerns emerged regarding the immense costs of AI data centers, shook technology stocks across the board. As the Nasdaq index fell by 0.90%, AI and semiconductor-related stocks such as Nvidia (-1.6%), Broadcom (-4.4%), AMD (-3.4%), and Micron (-3.9%) all plummeted, rapidly freezing investor sentiment even in the risky virtual asset market.

Geopolitical risks and inflation fears, which are tightening the macro economy, also exacerbated the downward pressure on the coin market. Despite news of the United Arab Emirates (UAE) withdrawing from OPEC, discussions for an end to the war between the US and Iran stalled, further increasing supply chain instability. Consequently, Brent crude soared to $111.26 per barrel and West Texas Intermediate (WTI) to $99.93, crushing market expectations for interest rate cuts.

Market experts predict that the virtual asset market, including Upbit, will fluctuate in the short term based on macro events without a clear direction. With the benchmark interest rate likely to be frozen at 3.50-3.75% at the ongoing US Federal Open Market Committee (FOMC) meeting, Federal Reserve Chair Jerome Powell's statements on the high oil price situation and future policy direction will be key to short-term volatility. However, with earnings reports from major big tech companies such as Alphabet, Microsoft, Amazon, Meta, and Apple lined up, it remains to be seen whether their strong performance could be the last spark to reverse the atmosphere of the frozen virtual asset market.

*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.*