There was a good level of optimism in the cryptocurrency market heading into last week, with many investors speculating about a potential “Christmas rally” for Bitcoin. While the leading cryptocurrency hit the $100,000 mark on Christmas Day, it didn’t take long for the bears to regain control.
It’s been almost the same story for most other large assets, including Ethereum, Solana, and XRP. The recent bearish climate for the cryptocurrency market has pushed a cloud of uncertainty around the digital asset sector as the historic year 2024 comes to a close.
Why is trading activity diminishing in the market?
In its latest post on the X platform, market intelligence company Santiment subscriber An interesting insight into the cryptocurrency market in the final days of 2024. According to the blockchain company, market trading volume is steadily declining across various cryptocurrency sectors.
Data from Santiment shows that trading volume fell by 64% in the past week, with sectors such as AI/Big Data and memecoin reaching new weekly highs. This seems like a complete reversal from a positive market trend considering that the price of Bitcoin had just hit a new record high of $108,135 the previous week.
At the same time, Santiment believes everyone should have expected trading volume to decline, especially speculative altcoins. “With the holidays here and traders getting their money in order at the end of the year, the last week of December is often one of the least active times of the year,” the analytics firm explained.
Likewise, a Quicktake analyst with the alias Grizzly Mentioned The Coinbase Premium Index, which tracks the percentage difference between the price of Coinbase Pro (USD) and the price of Binance (USDT), has declined for similar reasons. Decreased market participation during the holiday season, coupled with limited cash flow, likely contributed to lower prices, Grizzly said.
Source: Santiment/X
However, Santiment noted that the cryptocurrency market could at least see a “final, unexpectedly large” rally before the end of 2024 if whales continue to show their strong tendency to accumulate. This pump-to-market could happen even with the current lack of retail interest and engagement.
Total crypto market capitalization
As of this writing, the total cryptocurrency market cap is approximately $3.43 trillion, reflecting a 2.2% decline over the past 24 hours. With the market capitalization of cryptocurrencies up more than 100% year-to-date, there is no doubt that regardless of how the year ends, 2024 has been an excellent period for the digital asset sector.
The crypto market cap on the daily timeframe | Source: TOTAL chart on TradingView
Featured image from iStock, chart from TradingView
Comments are closed, but trackbacks and pingbacks are open.