Crypto Volatility Plunges: Bitcoin and Ethereum’s Summer Slumber

• Bitcoin and Ethereum have seen a decrease in volatility to their lowest point in two years.
• Monthly trade volume for both assets has stayed muted over much of Q2 and July thus far.
• BTC and ETH deposits to exchanges have been on a downward spiral for weeks, hitting multi-year lows at the time of writing.

Crypto Volatility Plunges

The two largest cryptos, Bitcoin and Ethereum, have held on to their gains for more than a month since the last meaningful rise in June. July 29, 2023 Aniket Verma Journalist Aniket Verma Journalist July 29, 2023 Share this article Share Tweet According to digital assets data provider Kaiko, the 90-day annualized volatility for Bitcoin [BTC] and Ethereum [ETH] plunged to two-year lows, giving a 360-degree flip to the historical debate over cryptos’ extreme volatility.

Market Inactivity

Monthly trade volume for both assets stayed muted over much of Q2 and July thus far. BTC and ETH deposits to exchanges have been on a downward spiral for weeks. The ongoing quiet in the crypto market has put the spotlight back on one of the most-talked about topics in the sphere – volatility.

Decreasing Trade Volume

What looked like the beginning of another extended bull market in June plummeted to a damp squib for many investors. As evident from Token Terminal, BTC’s monthly trade volume stayed muted over much of Q2 and July thus far. On similar lines, the frequency at which ETH exchanged hands went down significantly over the past few months with July showing little signs of improvement.

Shrinking Liquid Supply

The dip in trading activity could be due to shrinking liquid supply i.e., the number of tokens available for buying and selling in the secondary market. According to on-chain analytics firm Glassnode, BTC and ETH deposits to exchanges have been on a downward spiral for weeks, hitting multi-year lows at the time of writing.

Long Term Holding Strategy?

Such large withdrawals can be explained by either a shift to a long-term holding strategy or a willingness to keep one’s funds in self-custody