It is worth noting that cryptocurrency traders are not showing any noticeable activity right now. In particular, trading volumes on centralized exchanges have now dropped to a year low, confirming the theory that investors’ interest in digital assets is waning.

At the same time, Kaiko analysts note a tangible decline in this indicator over the weekend, which fell below the average result over the past year. The situation follows the collapse of major US banks like Silicon Valley Bank and Signature in March 2023. Here is the relevant chart.

Be that as it may, experts expect a gradual improvement in what’s happening.

What’s happening in cryptocurrency trading

The BTC exchange rate has once again risen above the $27,000 line today. At the same time, on the scale of the 4-hour chart, the price failed to overcome two previous local highs.

Despite the lack of noticeable activity from the bulls, a popular trader under the nickname Stockmoney Lizards on Twitter believes that the long-term bottom for the price of Bitcoin has already been passed. To prove his hypothesis, he posted a comparison of the 2014-2016 and 2021-2023 bearish trend charts. Here it is.

But the head of the Eight platform Michael van de Poppe said that “serious action” from this year should not be expected, that is, traders are unlikely to witness noticeable leaps in the Bitcoin chart. More interesting events will traditionally appear in 2024, when the next BTC halving takes place.

In the short term, the market is approaching a surge in trader activity – as evidenced by the Bitcoin volatility chart.

This figure has fallen to lows set back in October last year. Usually such periods of slack are followed by large movements in the price of the asset.

This may also be due to lower liquidity in the cryptocurrency market. In other words, there are not as many coins traded as before. Consequently, large trades are able to move the exchange rate of a particular coin in one direction or another more perceptibly.

Macroeconomic conditions

The Personal Consumption Expenditures Index (PCE) will be released in the US on May 26. The index is an important factor in determining US inflation as well as the Federal Reserve’s policy towards changes in the benchmark lending rate.

Recall that last week US Federal Reserve Chairman Jerome Powell gave a speech regarding his agency’s future actions. Although there were no overtly optimistic statements in Powell’s words, after his speech the probability of a pause in the base credit rate hike increased by around 20 per cent.

Another US Fed member Philip Jefferson made a slightly reassuring statement the day before at the 2023 International Insurance Forum event in Washington DC. Here’s his quote on what’s going on, as cited by Cointelegraph.

While we don’t have the PCE report for April, the other inflation indicator in the form of the Consumer Price Index (CPI) showed a slight improvement in April.

Since last spring the US Federal Reserve has continuously increased the base lending rate to combat rising inflation. These actions have had a negative effect on markets as they make it more difficult to borrow new capital for investment and trading. A rate hike also has a negative impact on companies’ reports, causing their shares and the stock market as a whole to fall in value.

If the US Federal Reserve stops raising rates in June, such an event could still trigger a rebound in many asset prices – including cryptocurrencies. If that happens, however, financial lending will become more accessible, which means that the opportunities to raise and invest capital will also increase.

Cryptocurrency whales are losing their influence

Analysts at the CryptoQuant platform have drawn some conclusions from this month’s market crash. Here’s a quote from their fresh report.

The latest fall in Bitcoin’s price came after long-term holders of the cryptocurrency made their highest profit of the year – more than 34 per cent. On a larger scale, all market participants managed to make profits in excess of 7 per cent on average.

The second finding is that most of the coins sent to exchanges for sale in recent days have been transferred from the wallets of “whales”. These are market players whose balance exceeds the 1,000 BTC mark.

Nevertheless, the overall picture remains slightly different. Gradually, the influence of whales on the market is decreasing, which means that BTCs are distributed to more wallets among investors.

Traders are in no hurry to buy Bitcoin

The Fear and Greed Index from analysts at Alternative is at 50 points out of 100. But that doesn’t mean that market players are completely neutral in their decisions about Bitcoin.

As analysts point out, the price of BTC only needs to fall below a new support level to trigger a mass panic. That is, for now, the sentiment is more negative than positive.


It looks like the period of reduced activity in the cryptocurrency market may end soon. However, it made sense in any case. After all, Bitcoin was up 69 percent in the first quarter of 2023, while Solana gave away more than 100 percent growth. And after something like that, the digital asset market needs a respite, which is exactly what is happening now.


Follow developments in our cryptochat. There we discuss other important developments that affect the world of decentralised assets in one way or another.