Bitcoin trading volume on Binance drops to pre-zero fee levels

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The data shows that Bitcoin trading volume on Binance has now fallen to levels not seen since the fee was removed.

Binance’s 7-day average Bitcoin trading volume continues to decline

According to the latest weekly report from Arcane Research, the market has recently seen a significant drop in activity. “Daily Trading Volume” is an indicator that measures the total amount of Bitcoin that has been traded on any spot exchange on any given day.

Arcane Research’s general measure of spot market trading volume is based on total transfers on Bitwise 10 exchanges. Although these exchanges do not cover the entire market, their volume data is the most reliable. available among all exchanges, and their activity always serves as a decent approximation of the market-wide trend.

When the trading volume on these exchanges is high, it means that a large number of coins are currently being transferred to the spot market. Such a trend suggests that traders are active right now. On the other hand, low values ​​imply that BTC activity is low at the moment, as investors make little movement on spot exchanges.

Now, here is a graph that shows the trend of the 7-day average Bitcoin trading volume for Binance and that of the rest of the Bitwise 10 exchanges separately:

Looks like the 7-day average value of Binance’s metric has fallen recently | Source: Arcane Research’s Ahead of the Curve – January 3

The reason Binance spot volume is displayed separately from other exchanges is that the platform adopted a zero fee policy for its BTC pairs last summer, which led to explosive growth in its volumes, and the exchange quickly outpaced all the rest of the combined market.

However, much of this increase in volume was likely due to wash trading, as the lack of fees meant that high volume trading strategies were now viable. Still, there was obviously an organic improvement in activity as well, as some investors reportedly left other exchanges in favor of Binance after the switch.

As you can see from the chart, trading volume on Binance peaked around November last year, but has since declined. More recently, the indicator hit the lowest values ​​since the crypto exchange scrapped its fees.

There is also very little activity in the rest of the market at the moment as their combined volume remains at fairly low levels. The report notes that this drop in market-wide participation could be partly due to the holiday season.

BTC price

As of this writing, Bitcoin is trading around $16,800, up 1% in the past week.

The value of crypto seems to have risen sharply in recent days | Source: BTCUSD on TradingView.com

Featured image of Kanchanara from Unsplash.com, charts from TradingView.com, Arcane Research

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