After peaking at around $30,000, sellers pressured Bitcoin (BTC-USD), which found support at $26,000. From here, expect volatility for BTC and cryptocurrencies to rise. Cryptocurrency volume on centralized exchanges is falling.
The combined cryptocurrency spot and derivatives trading is down by 11.5% Y/Y. In response to the weak volumes, bitcoin mining firms like Marathon Digital (MARA) and Riot Platforms (RIOT) erased their July-August rally when shares lost half their value.
Coinbase (COIN) shares rose when investors thought that Greyscale’s (GBTC) legal victory over the SEC would boost interest in Bitcoin Trust. Yet headwinds persist in the industry. For example, the SEC said in a filing that Binance.US is not cooperating with its investigation.
What To Do
Investors need to exercise extra caution. The low cryptocurrency volumes will enable smaller players on the platforms to move prices. The low volumes are also a disadvantage for those who need to sell their crypto holdings in exchange for fiat currency.
Users may consider withdrawing cryptocurrency held on the platform to a private wallet. That increases the holding’s safety because it does not depend on a third-party exchange.
Be wary of bitcoin mining stocks. Short-sellers are betting heavily against Marathon with a 30.4% short float. They have a 17.5% short float position against Riot Platforms.
