- Crypto trading volumes plummet as traders remain cautious amid election uncertainties and broader macroeconomic fears.
- Meme coins, Layer 2 tokens, and AI-related assets show sharp volume declines, signaling a market hesitation.
- Reduced market participation often precedes rebounds, hinting that cautious traders may eventually seek undervalued opportunities.
Crypto trading volumes have plunged to their lowest levels since the pre-“Trump Pump,” according to Santiment. Top assets across Layer 1, Layer 2, meme coins, and AI/Big Data sectors saw trading volumes decline sharply. As traders become cautious, this trend shows a decline in market participation. Notably, the decline occurs at the same time as risk aversion and election-related uncertainty, leading to widespread “trading paralysis” in the cryptocurrency market.
Sharp Decline Across Key Sectors
The data shows noticeable declines in trading volumes for DOGE, NEAR, MATIC, and BTC. Meme coins, represented by DOGE, experienced fluctuating volumes earlier but dropped steeply in recent weeks. Similarly, Layer 2 tokens such as MATIC followed a comparable downward trend, with trading activity reaching minimal levels.
Source: Santment
AI and Big Data-related tokens, including NEAR, also exhibited reduced engagement. This aligns with broader market behavior, signaling waning trader confidence across sectors. While Bitcoin maintained relatively stable price movements, its trading volumes mirrored the market-wide decline, reflecting subdued enthusiasm.
The reduced activity suggests hesitation among traders and a lack of engagement across various crypto segments. These declining volumes highlight a shift in market sentiment, with participants opting for caution over aggressive trades.
Impact of External Factors and Future Dynamics
Wider macroeconomic worries are correlated with the decline in trade volumes. Market players’ fear, uncertainty, and doubt (FUD) have increased as a result of events like the US elections. As a result, risk-averse behavior dominates, reducing market liquidity and overall participation.
However, this decline in trading activity often increases the probability of market rebounds. Historical patterns suggest that heightened caution can create favorable conditions for future recovery. Consequently, traders may shift focus to capitalize on undervalued opportunities as confidence improves.
Moreover, the shows the need for renewed market engagement. Besides reflecting market sentiment, the data points to external influences impacting decision-making. A sustained drop in trading volumes could further dampen liquidity and limit future price movements.
The post Cautious Traders Drive Crypto Activity to Lowest Levels Since Pre-“Trump Pump” Era appeared first on Cryptonewsland.
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