Fading Altcoin Trade Volume: Calm Before a Mini Bull Run?

  • Kaiko market research platform released its latest analysis of the future of altcoins.
  • The altcoin trade volumes metric has significantly dropped from its all-time high.
  • Historical data associated such a situation with preceding a mini bull run.

Kaiko, a leading market data offering and research platform, has released its latest Analysis of the future of altcoins. According to the research platform, there is still a long way to go before the altcoin trade volumes metric reaches the level of previous bull runs.

In a recent video, Clara Medalie, director of research at Kaiko, observed a significant drop in altcoin trade volume. From the data displayed, she explained that the current altcoins trade volume is about one-third of the value in Q1, 2023. According to Medalie, the altcoins’ trade volume fell to its lowest level in the past few years before the Ripple ruling caused a slight spike in volume, leading prices to surge for a few altcoins.

Despite the significant drop in altcoins trade volume from the 2021 highs, Medalie observed it is still higher than its value in 2019. However, she expects it to further suppress in the next few months in line with historical trends.

Medalie looked at a new way to study short-term market trends. She used the ratio of Bitcoin trade volume to altcoin trade volume. She observed that this metric has dropped over the past few months. According to her, historical data associated such a situation with preceding a mini bull run.

The research analyst explained this outcome to result from altcoins typically having some of the highest returns in a bull market. It shows a rotation of funds between the altcoin and Bitcoin markets. Kaiko’s recent data shows that, since the beginning of the year, the Bitcoin volume dominance has dropped from 45% to about 27% at the time of the Analysis. The biggest shift happened in the weeks following the court’s ruling on Ripple’s case on July 13, 2023.

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