Bitcoin recently reached an all-time high of $69,000 on Mar. 5, only to experience a swift 14% correction shortly after, dropping its price to $59,300. Despite this drop, Bitcoin managed to climb back up to $66,000 the following day. The intense price volatility on Mar. 5 led to record-breaking trading volumes on centralized exchanges.
An analysis of Kaiko data by CryptoSlate revealed a 405% increase in trading volume between Mar. 2 and Mar. 5, soaring from $9.15 billion to $46.25 billion. This surge in trading volume was accompanied by a significant rise in trade count, jumping from 10.12 million to 32.79 million over the same period. This suggests a higher level of engagement in the market from both retail and institutional investors.
When analyzing the distribution of trading volume between US and global markets, it was found that the global market has consistently dominated Bitcoin trading volume. However, the US market’s share of the volume increased from 11.6% on Mar. 2 to 18.05% by Mar. 5, indicating a growing interest from US-based investors during this period of volatility.
Binance continued to be a dominant force in the global trading volume with 51.54%, while Coinbase led the US exchange market with a 57.89% share. These two exchanges have long been known for their significant presence in the crypto market, representing a substantial portion of global trading activity.
Despite recent issues with account balances on Coinbase, the impact on the overall trading volume on the exchange seemed minimal. Coinbase still maintained its dominance in the US market, reflecting traders’ trust in the platform even during times of volatility. While there was a significant outflow of Bitcoin from the exchange, overall trading remained strong.
The intense price volatility experienced in the market during this period attracted significant trading activity from both existing and new market participants. The surge in volume, trade count, and trade sizes indicated that traders were actively engaging with the market, taking advantage of Bitcoin’s price fluctuations.
Centralized exchanges played a crucial role in providing liquidity and price discovery, especially during times of significant market movements. Traders tended to gravitate towards exchanges with high liquidity and a well-established reputation, such as Binance and Coinbase, during periods of high volatility.
The recent surge in trading activity and price volatility in the Bitcoin market highlighted the resilience of traders and the importance of centralized exchanges in facilitating market activity. Despite the brief spike to an all-time high followed by a sharp correction, traders remained actively engaged and responsive to market movements, showcasing the dynamic nature of the cryptocurrency market.