Bitcoin recently reached its all-time high of $69,000 on March 5th, 2022, only to experience a swift and sharp 14% correction shortly after, dropping its price to $59,300. The volatility in Bitcoin’s price led to record-breaking trading volumes on centralized exchanges, indicating heightened market activity and trader engagement.
An analysis of Kaiko data by CryptoSlate revealed a staggering 405% increase in trading volume between March 2nd and March 5th, spiking from $9.15 billion to $46.25 billion. This surge in volume was accompanied by a significant growth in trade count, rising from 10.12 million to 32.79 million over the same period, showcasing a surge in market participation and a possible influx of retail and institutional investors.
The average trade size also saw a notable increase of over 55%, jumping from $904 to $1,410 between March 2nd and March 5th. This indicates larger capital movements within the market as traders rushed to capitalize on the price volatility and take advantage of trading opportunities presented by Bitcoin’s fluctuating prices.
The distribution of trading volume between US and global markets revealed an interesting trend, with the US market’s share increasing from 11.6% on March 2nd to 18.05% by March 5th. This shift signifies a surge in interest from US-based investors during the period of high volatility, highlighting the global appeal and impact of Bitcoin’s price movements on traders across different geographic regions.
As a longstanding trend, Binance continued to command a significant majority of the global trading volume with 51.54%, while Coinbase led the US exchange market with a 57.89% share. The dominance of these platforms underscores the preference of traders for exchanges with high liquidity and a strong reputation, particularly during times of increased market volatility.
Despite recent issues experienced by Coinbase related to account balances, the impact on overall trading volume on the exchange appeared to be minimal. This is evident by Coinbase’s continued dominance in the US market, indicating traders’ confidence in the platform’s ability to navigate challenges and maintain market activity, even during periods of heightened volatility.
The intense price volatility witnessed in the market attracted significant trading activity, drawing both existing and new participants to engage with Bitcoin. The surge in volume, trade count, and trade sizes signify a proactive response from traders to capitalize on market opportunities, highlighting the crucial role of centralized exchanges in facilitating liquidity and providing price discovery, especially during times of significant market movements.
Bitcoin’s recent price volatility has had a profound impact on trading volume and market activity, showcasing the resilience and adaptability of traders in responding to fluctuating market conditions. The surge in engagement and trading activity underscores the importance of centralized exchanges in facilitating market liquidity and providing a platform for traders to capitalize on price movements effectively.