Cryptocurrency trading

Cryptocurrencies are bearish over the summer as they navigate a two-month correction period following a string of negative stories.

Trading volume on the largest exchanges including Coinbase, Kraken, Binance and Bitstamp fell over 40% in June, according to data from crypto market data provider CryptoCompare, which cited lower prices and lower volatility as the reasons for the decline.

According to the report, the bitcoin price hit a monthly low of $28,908 in June and ended the month down 6%. A daily volume of $138.2 billion on June 22 was down 42.3% from the intra-month high in May.

The report cited China as a major catalyst, according to Reuters, which reported on it earlier on Monday. China’s latest of many efforts over the years to crack down on the industry has had more impact than ever. Investors and experts in the cryptocurrency ecosystem still see a long-term positive trend for bitcoin and other cryptocurrencies, however.

Teddy Valli, Chief Investment Officer, Perivale Global, said, “The Chinese action has created a lot of fear, which is visible in the markets. “The digital asset ecosystem has been punched in the face, so it is currently fighting in the middle of the ring versus the ropes. Usually, when you have big sell-offs, participants are quite intimidated and pull back their chips.

Vallee said it still doesn’t see large inflows back from exchanges, funds rates are still negative, the number of new wallets is down.

Factors Behind The Slowdown

In late June, China ordered a halt to cryptocurrencies as it prepares to launch its state-backed digital currency. That was closed mining operations in different provinces that hosted 50% to 60% of all of Bitcoin’s mining power.

Gabor Gurbax, director of digital assets strategy at VenTech, said that as miners left China, they weren’t transacting much with the bitcoins they’ve mined.

Additionally, the emerging ESG around bitcoin’s proof-of-work consensus mechanism and negative regulatory undertones from the Financial Action Task Force, the intergovernmental anti-money laundering watchdog, told CNBC-Voice, Ben Foreman, managing partner at alternative investment firm Parafi Capital. The narrative has dragged down the mood even further in the markets. ESG stands for Environmental, Social and Governance Factors.

Once these stories began to seep through the market in May, sentiment dropped to single-digit levels on a scale of 1 to 150, said Nick Mancini, research analyst at crypto sentiment analytics platform Trade the Chain. “Ultimately, this resulted in a drop in trade volume for bitcoin by almost half since its peak, and it is down 32% from its June average.

Gurbax also said that summer could be a time of low volume, even inequities and that investors may still feel pain after the crypto market has lost so much of its value this year.

He added that this year also the price of bitcoin climbed as high as $60,0 and as high as $4,0, which brought a lot of new interest and new investors in the cryptocurrency, which has yet to bear bitcoin. The market hasn’t weathered.

By Alex Alena

Alex Alena has been the lead news writer at Cryptocurrency Updates. With a degree in communications, Matt has an uncanny ability to make the most complex subject matter easy to understand.