Crypto market volumes remain below average, with the latest Kaiko report stating that CEX’s average daily spot volume over the past four months is the lowest since October 2020, when BTC was at $10,000 and ETH was at $350.

October 2020 is the moment when Defi takes off. Market trading volume becomes active and the market enters a bull market mode. But now there is no new capital entering the market, and there is no new narrative. The Ethereum ecosystem mainly relies on Layer-2 and the airdrop interaction of early projects.

As the market generally believes that it is now the bottom range of the bear market, supported by positive factors such as the halving of the pie next year, the approval of spot ETFs, and the Federal Reserve's interest rate cuts, funds continue to increase their holdings of mainstream crypto assets, but they are mainly long-term allocations, and they raise their holdings after increasing their holdings. Save it to the wallet and do not trade it.

Currently, most of the stocks of Bitcoin and Ethereum on exchanges have reached a five-year low.

This has resulted in the Bitcoin and Ethereum spot trading markets being relatively deserted, with very low trading volume and very few chips in the trading state.

Due to the unprecedented rate hikes and balance sheet reduction by the Federal Reserve over the past year, coupled with the U.S. policy of suppressing the crypto market, funds in the crypto market have been continuously flowing out, and there has been no major inflow of new funds. It is not an exaggeration to say that the crypto market has fallen into a liquidity crisis.

The thin liquidity and the small number of chips available for trading, coupled with the bear market, meanwhile, mean downward fluctuations are more likely. This is why Bitcoin and Ethereum fell by more than 10% within 5 minutes in the early morning of August 18.

The trading volume in the spot market is not large, but there are also two derivatives markets: contracts and options. Since there are no more leeks in the spot market, we have to wait for the leeks in the derivatives market to gather to a certain size, find a precise moment when market liquidity is low, and release negative news, and then trigger a stampede of contracts through large fluctuations to complete the harvest.

This results in the market usually being in a "sideways" state, but it is very easy to fluctuate significantly if there is any disturbance. This may be the norm in the coming months.

Many analysts predict that there will be a big drop before the next bull market, which is also possible. After all, with such a high interest rate environment from the Federal Reserve, there is no incremental funds in the market, and it cannot remain in a "sideways" state. The long leveraged funds that hunt down the bottom are also a piece of fat.

The main funds have a manipulation method: for example, holding spot and short positions at the same time, they can evaluate the difficulty of market price smashing and calculate at which point the profit will be maximized. At this time, they will take action.

In the current crypto market, data from the derivatives market is more valuable. If you see very large capital positions between buyers and sellers in the contract and options markets, you should be careful. Big fluctuations are imminent. #美联储是否加息？ #fdusd #带你看看币安Launchpad #荣耀时刻 #BTC