Daily trade volume from centralized exchanges (CEX) has sunk to lows last seen in late 2020, per data from Kaiko.
Crypto sentiment
The chart below shows a pattern of declining CEX trade volume tops from May 2021 onwards. This year saw a double top at $100 billion around April. Since then, CEX trading volume has continued sliding lower.
The current daily volume is approximately $5 billion – a level last seen at the tail end of the previous bear cycle. During that time, Bitcoin was winding up to recapture $20,000, signaling the start of the last bull phase.
Commenting on the data, co-founder of Reflexivity Research, Will Clemente, spoke about a situation of market indifference – adding that times like this could be profitable for those still around. He said:
“Market in aggregate is in a period of apathy and capitulation through time — lack of speculative interest from the masses sparks opportunity for those with strong belief.”
The Crypto Fear and Greed Index shows that the last three weeks have hoovered around 50, supporting Clemente’s call on apathetic market sentiment.
What about DeFi markets?
Analysis of aggregate Total Value Locked (TVL) indicated participants have not moved to DeFi from CEXs – suggesting crypto capitulation on a broader scale.
The chart below shows TVL across all protocols dipping strongly from early May 2022 – as a response to the Terra ecosystem implosion – leading to a local bottom of $38 billion on Jan 1.
Although 2023 has seen a gradual uptick from the local bottom, hitting a peak of $53 billion on April 16, the overall pattern for this year is flat.
Further analysis shows Binance Smart Chain (BSC) and TRON were the biggest DeFi winners from Terra’s demise.
On May 6, Terra Classic accounted for 14.8% of the aggregate TVL – while BSC and TRON made up 7.6% and 3.2%, respectively.
As of today, BSC makes up 9.4% of the market, and TRON tripled its market share to 12%. Ethereum has remained consistently around 60% since October 2022.
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