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Binance shows resistance to the trade volume trend

Binance shows resistance to the trade volume trend

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As one of the fastest growing industries in the world, the cryptocurrency sector has experienced tremendous popularity over the past two years. This sudden increase was due to the bull market of 2021, which not only managed to create a huge community in the industry, but also saw the value of several projects explode.

While blockchain as a collective sector may still be in its infancy, it has nevertheless established itself as an asset class with a lot of potential. This fact can be seen more clearly now that even certain countries have moved to legalize BTC, the leading cryptocurrency, as legal tender.

However, things have been quite difficult for citizen investors in the last couple of months. Since the market crash, tokens and related assets have suffered greatly in terms of both value and engagement. Projects and ecosystems that once recorded millions of dollars worth of trade daily have faced liquidity problems due to declining investor interest and participation.

Despite all this, there have certainly been winners and losers. While a huge number of organizations struggled to stay in business and avoid bankruptcy, some have enjoyed the resources they earned during the bull run, allowing them to continue to build their infrastructure now.

Companies like Coinbase were forced to lay off workers to cut costs, while major projects like Celsius faced serious liquidity problems. All in all, it had been a fiasco for some organizations that had previously performed exceptionally well. The sudden market crash not only dropped the value of cryptocurrencies, but also affected large companies.

Investors are also yet to get a clear idea of ​​where the market may move in the coming days and have been skeptical about parking their funds recently. However, this has not been the case for a few of the aforementioned winners.

Stock exchanges and their important role in the industry

As an emerging sector, investor participation in cryptocurrencies is not yet common. In fact, a study found that over 98% of people didn’t even understand the basics of these digital resources. Because of this, the only direct exposure investors have as part of the blockchain industry is through exchanges.

While awareness that they are potential can be gained through mainstream media platforms, it is only through cryptocurrency exchanges that these masses can truly become part of the industry. Thus, exchanges play an important role in the industry and influence cryptocurrency price movements to a large extent.

One such major exchange that has historically been a huge part of the blockchain industry is Binance. As one of the world’s largest exchanges, the development or operation of its platform is monitored by investors and financial analysts. Recently, one such case has been observed where the stock market has traded against the volume trend.

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Binance is bucking the trade volume trend

Trade volume is an excellent indicator of the prolongation of a bear market. When traders take advantage of volatility during initial price declines, trade volume typically increases. Simply put, trading volume is the total number of shares of a security traded during a given period of time. Investors often use trading volume to confirm the existence or continuation of a trend or a trend reversal. It usually gives investors a signal to enter the market.

Binance resists the development of trading volumes

Looking at the combined volume of BTC and ETH pairs across the 14 major exchanges, it is notable that trading volumes have not increased. However, often such aggregated data can be somewhat misleading. When separating Binance from the other exchanges, it can be seen that there has been a strong imbalance between the 13 other exchanges and the aforementioned.

Weekly trading volume 2022

This volume above Binance may be partially due to the fact that it removed fees from BTC/ETH pairs earlier this year. Thus, if we just consider the volume of trading on Binance, it points out that there may be another crash in the market. This higher demand, which puts Binance on a completely different spectrum than its competitors, is due to the feature of no trading fees, which many smaller exchanges unfortunately cannot afford.

What is Binance?

Binance, founded in 2017, is the largest exchange in the world in terms of trading volume, which is evident from the above data. It was founded by ChangPeng Zhao, also known as CZ. The current CEO was a developer who created several high frequency trading software.

Binance

Initially operating in China, the company had to move its headquarters due to China’s ban on cryptocurrency trading and related activities. It is registered in the Cayman Islands and was already used by over 28.6 million users in 2021. Binance also has two versions of its exchange offering. One is meant to serve its customer base in the United States called Binance US, while the other is a version available for other countries where it operates.

How can this affect the market as a whole

Several aspects determine the future movements of the market. While this doesn’t necessarily guarantee some kind of immediate turn of events in terms of industry value, the statistic describes the migration of users from other exchanges to Binance. This simple change can have a long-term impact.

If only Binance’s volume is taken into account, the market value may likely drop sometime soon. But it cannot be speculated precisely because some of the business that goes to one unit may not be unnatural. The kind of growth and trust that Binance has built over the years can apply to more investors.

Bitcoin price

It certainly hasn’t affected the cryptocurrency market yet, as prices still seem to be at the level they’ve been trading at for several months. At the time of writing, BTC, the most popular cryptocurrency, is trading at around $19,000 with a market cap of over $360 billion.

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