Crypto traders avoid risk and shelter in stablecoins as the market reaches a turning point
On-chain analytics firm Glassnode published a report hinting that investors are rotating capital toward risk-off assets like stablecoins and Bitcoin. Technicals show that altcoins are at a crucial turning point between a positive and a negative breakout.
Glassnode’s analysis of Uniswap and futures trading volumes reveals that the uptrend that began in the first quarter of 2023 began cooling off in April, with regulatory concerns and a lack of liquidity promoting risk-off tendencies among traders.
The report stated that while it might appear that memecoins caused a surge in Uniswap’s trading volume, a closer look at Uniswap’s pools reveals that the majority of volume was for top cryptocurrencies in Wrapped BTC, Ether (ETH) and stablecoins.
Moreover, sandwich attacks and bot trading accounted for a significant amount of this trading activity. The report read:
“If we take into account that many bots engage in arbitrage or sandwich attacks, the degree of ‘organic’ trading volume on Uniswap may well account for over two-thirds of all DEX activity.”
The futures trading volumes for Ether on centralized exchanges contracted in May, with 30-day average trading volumes dropping to $12 billion per day against a yearly average of $21.5 billion.
Glassnode analysts suggested that the decline in futures trading volumes is a sign that “institutional trading interest and liquidity remains quite weak.”
Similarly, the market share for Bitcoin (BTC) perpetuals versus their Ether counterparts shows a huge discrepancy, with 65.5% dominance for Bitcoin. In 2022, the two assets had equal shares in the perpetual swap space. However, the trend has shifted significantly in the last year.
Tether (USDT) has absorbed a significant proportion of outflows
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