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In the past two months, the cryptocurrency market has witnessed a notable slowdown. Particularly, the sharp decline in spot trading volumes for Bitcoin 
$104,602 and leading altcoins indicates that traders are adopting a more cautious approach. This contraction in trading volume signals a period of questioning market confidence. Macroeconomic developments and upcoming economic data are directly influencing the decisions of cryptocurrency users.
Severe Decline in Bitcoin and Altcoin Volumes
According to analysis data, Bitcoin’s trading volume, which reached $44 billion on February 3, dwindled to $10 billion by the end of the quarter. This represents a staggering decline of up to 77%. Similar trends are evident in altcoins as well, with trading volumes dropping from $122 billion at the end of January and beginning of February to just $23 billion by the end of March. This corresponds to a contraction of over 80%.
This dramatic decrease in volumes may stem from uncertainty and indecisiveness regarding price movements among market participants. For retail investors, the reduction in volatility emphasizes a “wait-and-see” strategy. Consequently, this situation has led to a significant stagnation in the overall dynamics of the market.
Binance Gains Market Share
Despite this downturn, Binance has successfully increased its share of trading volume. As of February 3, the platform held 33% of Bitcoin’s daily trading volume, which rose to 49% by the end of March. The rapid decline in volumes on competing exchanges has made Binance more attractive in terms of liquidity. This trend confirms investors’ tendency to gravitate towards larger and more reliable platforms during periods of risk.
The situation is similar in the altcoin sector, where Binance’s share has risen from 38% to 44%. Notably, major projects like BNB, TON, and EOS have maintained activity despite volume drops, sustaining trading traffic on Binance. Market experts highlight that the increase in Binance’s reserves supports this trend.
Macroeconomic Uncertainties Directing Investors
According to independent analyst Martuun, Bitcoin reserves on Binance increased from 568,768 BTC to 590,874 BTC over two months. This indicates that investors are starting to direct their funds specifically towards this platform. It is believed that macroeconomic uncertainties and the impending Consumer Price Index data influence investors’ preference for safer platforms.
The recent uptick in BTC transfers to Binance may signify not only a technical but also a psychological shift. While trust is always crucial in the cryptocurrency market, it becomes even more significant during economic stress periods. Investors tend to seek refuge in places where they feel less risk in a downward-trending market.
