Cryptocurrency markets experienced a significant slowdown in May, with trading activity dropping 20% compared to April, according to a report by CCData. This marks the second consecutive month of declining trading volume across major exchanges.
The report attributes the slump to the post-halving lull, a historical trend following Bitcoin halving events. These events, which reduce the number of new bitcoins mined, can lead to temporary periods of lower market activity.
Trading on centralized exchanges, categorized as the spot market, witnessed a 21.6% volume drop in May compared to April. Binance remained the top contender in spot market volume, followed by Bybit, OKX, Coinbase, and Gate.io. However, all exchanges reported significant volume declines from April.
Despite the overall slowdown, the derivatives market, where investors place bets on future price movements, saw a surge in dominance. It now accounts for 70.1% of the total crypto market, up from 69.5% in April. However, derivative trading volumes also fell by 19.4% in May, marking the second consecutive month of decline.
The report highlights some positive signs. An uptick in funding rates, which reflect investor sentiment, suggests traders are turning bullish. Additionally, a surge in Ethereum option volumes points to speculation surrounding potential US-based Ethereum ETFs.
While the summer months traditionally see lower trading activity in traditional finance, the crypto market’s current slowdown appears more linked to the post-halving trend.
