Historical Data Suggests Volumes Bottom This Week
Lower Volumes Persist
Earlier this week, we witnessed approximately $2B in open interest being unwound within a matter of hours—a significant forced deleveraging event for an otherwise uneventful Tuesday, lacking a clear catalyst.
In our view, the selloff was largely technical and indicative of the negative seasonality we've been discussing recently. To backtrack, Monday and Tuesday followed a dovish Fed pivot at Jackson Hole, sparking a sharp rally in soft-landing plays like IWM and KRE—BTC included.
However, by Tuesday, this rally had lost steam. With substantial leverage built up and the macro backdrop stalling, there wasn't enough spot demand to push prices higher, triggering the unwinding of that leverage in an already illiquid market.
It's worth delving into some charts to better understand the dearth of spot market volumes.
In summary, spot volumes remain consistent with summer doldrums levels and have trended lower since the yen carry trade unwind on August 5th. Notably, trading activity on Coinbase is particularly subdued, further evidence that the US institutional bid for BTC has yet to return.
Below, you'll find BTC volume data across all spot exchanges. The forced selling around August 5th caused a clear spike, but both the 7-day and 3...Unlock this article by joining our Community!
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