CEX trading volumes decline in April after months of growth: Kaiko

After three months of consecutive growth, centralized exchange trading volumes fell to their lowest this year in April.

Centralized crypto exchanges saw a dip in trading volumes in April for the first time in three months as digital assets cooled off from a hot first quarter.

According to blockchain data provider Kaiko, trading volumes on centralized exchanges have fallen following three consecutive months of gains.

April’s volumes were almost half of those in March at roughly $500 billion, according to the data. The month was the lowest so far this year in terms of volumes, with March being the highest.

The data provider noted that volumes had reached pre-FTX collapse levels until April’s decline. It also noted that markets remain above 2020 levels in terms of trade volumes.

“Overall, however, the crypto market remains significantly larger than it was before the 2020 bull run,” said Kaiko.

Trade volumes on #CEXs declined in April after rising for three consecutive months and surpassing pre-FTX levels in March.

Overall, however, the crypto market remains significantly larger than it was before the 2020 bull run.#crypto #TradeVolume #liquidity #CEX pic.twitter.com/cmftFD3Qya

— Kaiko (@KaikoData) May 3, 2023

According to data from blockchain analyst Lars0x, legitimate centralized exchange spot volume decreased by 43.8% to $400.5 billion in April.

“The majority of the decrease is due to Binance adding back fees on BTC pairs,” Lars0x noted. Binance remains the market leader, with a dominance of 71.6%, according to their data.

Furthermore, Binance has a 24-hour trading volume of around $10 billion, which is significantly larger than its nearest rival, Coinbase with $1.1 billion, according to CoinGecko.

In late April, Cointelegraph reported that Binance’s Bitcoin balance increased by over 50,000 BTC, roughly $1.5 billion, in a month. The move preceded the sell-off as BTC hit heavy resistance just over the $30,000 level.

United States-based crypto exchange Coinbase has seen its app downloads also in decline in recent months as trading volumes dwindle in the sideways market, according to a report from Yahoo News.

Tom Grant, the vice president of research at Apptopia — a research firm that tracks app usage metrics — said the shrinking app usage paints a bearish picture for the company.

The CEX volume decline comes as digital asset markets began to retreat from their 2023 highs in mid-April. On April 16, total market capitalization hit an eleven-month high of $1.34 trillion. However, markets have declined 7.5% to $1.24 trillion since then.

Since the beginning of the year, crypto markets have gained 50% but they have remained largely range bound for the past six weeks or so.

Analysts have hinted that the correction is likely to continue as markets have been somewhat overheated for the first quarter of the year.

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