Crypto spot and derivatives volumes across exchanges have fallen more than 15% since May to around $4.2 trillion amid the extended market correction, according to data collected by CryptoCompare. It shows that the market has failed to recover from the historical damage done in the second quarter of this year.

Volume Slump Persists

Crypto trading volumes, closely contingent on the broader market sentiment, dipped over 28% in June to $1.41 trillion, reaching the lowest levels seen since December 2020, Bloomberg reported. The situation did not get much better in July, as the current volume is still down over 15% from May.

Katie Stockton, the co-founder of Fairlead Strategies, said the static and low volume will likely persist until a market reversal occurs:

“Volume has declined given the reduced excitement from investors in a cyclical bear market until crypto prices break out of their bear-market cycle, which could take months, we can expect volume to be below average.”

In June, Bitcoin futures contracts at the CME Group only reached $29 billion, the lowest level since July 2021. It’s worth noting that the primary cryptocurrency closed the worst quarter in the past decade, as BTC sat below the key $20,000 mark on July 1st.

In such a bearish condition, JP Morgan’s strategists even predicted on Thursday that BTC would continue plunging as its average production cost sunk from $24,000 at the beginning of June to $13,000 at its current level.

Coinbase’s Lead in Question

The violent drop in trading volume – as translated to the declined interest in cryptocurrency among investors – has been reflected in the diminished dominance of leading exchanges such as Coinbase.

The US giant experienced a severe slump in volume amid the ongoing crypto winter, resulting in its fallout from the list of the top 10 crypto exchanges ranked by trading volume.

Bloomberg’s report indicated that it only had a 2.9% average market share among the top 30 in June – down from 3.6% average in Q2 and 5.3% in Q1. Structural issues in its business model had made it suffer from competition with other challengers, Mizuho Securities USA analyst Dan Dolev commented.

Amidst growing concern regarding if the profit trajectory is on schedule, Coinbase decided to cut expenses as revenue dropped 27% in Q1 YoY. Later, it announced cutting 18% of its headcount, citing the perceivable impacts of impending recession and aggressive rate hikes by the Fed.