August Crypto Market Outlook: Low Activity, High Volatility Expected

Ecem EFE02/08/20242 Mins read266

August Crypto Market Outlook: Low Activity, High Volatility Expected

August Crypto Market: Reduced Liquidity and Trading Volumes Expected in Crypto

August Crypto Market Outlook – August has historically seen consistent downtrends in the cryptocurrency market, according to Coinbase analysts. This month is usually marked by reduced cryptocurrency market activity and a slump in the value of major tokens.

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“Seasonality hasn’t typically worked in crypto’s favor for the month of August,” said Coinbase analysts David Duong and David Han in the Friday’s Coinbase Weekly report. The analysts highlighted that August has historically seen lower market activity. For instance, Bitcoin spot volumes dropped 19% in August 2023 compared to June of the same year. Bitcoin futures volumes also decreased by 30% over the same period across global centralized exchanges.

Reduced Market Activity and Slumping Values

The analysts noted that Bitcoin averages a decline of 2.8% during August over the last five years. They attributed this trend to lower liquidity and trading volumes, which can lead to increased volatility during the month. The report suggested that we might see similar lackluster behavior this year as well.

Impact of Seasonal Trends on Cryptocurrency Market

Speaking to The Block, Bitfinex Head of Derivatives Jag Kooner also commented on the seasonal trends impacting the cryptocurrency market. He mentioned that August could see a lack of liquidity in many assets, with seasonality being one contributing factor. “We are currently seeing significant buy walls being built at range lows on several altcoins and we also expect the Bitcoin price to range between $61,000 to $70,000, which will provide an accumulation zone,” Kooner added.

Key Takeaways for Investors

For investors, understanding these seasonal trends can be crucial for making informed decisions. Reduced market activity and slumping values in August present both challenges and opportunities. While the decrease in liquidity can lead to increased volatility, it also provides potential accumulation zones for strategic investments.

FAQ: August Cryptocurrency Market Trends

Why is August historically a downtrend month for cryptocurrencies?

August has historically seen reduced market activity and a slump in the value of major tokens. Coinbase analysts attribute this trend to seasonal factors that affect overall market liquidity and trading volumes, leading to increased volatility.

What specific data supports the trend of decreased cryptocurrency activity in August?

According to Coinbase analysts, Bitcoin spot volumes dropped by 19% in August 2023 compared to June of the same year. Additionally, Bitcoin futures volumes decreased by 30% during the same period across global centralized exchanges.

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Ecem EFE

Since 2022, Ecem has been creating digital content, combining her passion for technology with writing. Continuing her education in the Mathematics department, Ecem focuses on producing in-depth content on areas such as blockchain, artificial intelligence, and cryptocurrency. She aims to simplify these topics and present them to a wide audience, sharing valuable insights into the crypto industry through her writing. With her innovative content, she strives to raise awareness in the digital world.