The tendency to invest in the cryptocurrency market seems to have eased somewhat after the sharp sell-off last month. As a result, the volume of the crypto market has dropped to its lowest level since December 2020.
Data from CryptoCompare revealed that the volume of all cryptocurrencies fell by more than 30% last January from the previous month to $1.8 trillion.
The main reason for the sharp decline in crypto trading is due to changes in the Federal Reserve’s monetary policy by preparing to raise interest rates. This makes digital currencies and other declared risky assets a risk that most investors in the market do not want to bear.
The bitcoin with the largest trading volume has lost a fifth of its value. The same is true for other small cryptocurrencies and tokens on the market, which are facing declining trading volumes.
This decline is comparable to the “crypto winter” of the time, which took a long time to recover.
The last crypto winter was 2018 when the bitcoin price plummeted by more than 80% which took more than a year to recover to reach high levels again.