- Bitcoin and Ethereum are defying negative market sentiment and are witnessing an increase in trading volume to the highest level of the month.
- Traders maintain a positive outlook on BTC and ETH as flows remain negative.
Bitcoin and Ethereum, along with the entire cryptocurrency market, reacted to the recent move by the Security and Exchange Commission (SEC). Nevertheless, a remarkable turnaround has taken place following the noticeable drop in trading activity following the SEC’s latest action.
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The volume of Bitcoin and Ethereum rises to the highest point in the month
Following the SEC’s announcement that Binance US and Coinbase are taking legal action, major cryptocurrencies, including Bitcoin and Ethereum, saw a decline in both price and trading volume. This decline can be attributed to FUD as market participants observed the overall market reaction.
However, after the initial dip on June 5, there was a significant rebound in trading volume in the market, leading to renewed interest in dip buying and panic selling.
Source: Sentiment
Sanitation data showed that Bitcoin and Ethereum reached their highest monthly volume levels.
Analyzing the chart, it became clear that Bitcoin’s volume passed 20 billion after the drop on June 4. It temporarily dropped to about 8 billion on that day, but quickly peaked the next day, reaching its peak for the month.
Similarly, Ethereum’s volume fell to about 3 billion on June 4, but rose to about 10 billion in the following days. At the time of writing, Ethereum’s volume has already reached around 7 billion.
This spike in volume was not limited to just Bitcoin and Ethereum, but was also seen in other cryptocurrencies such as Binance Coin (BNB), Solana, and Cardano.
Bitcoin and Ethereum are seeing a negative flow
Analysis of Bitcoin and Ethereum’s Netflow data on CryptoQuant revealed a consistent negative flow over the past few days. This suggested that sellers rather than buyers have mainly driven the recent increase in trading volume.
Specifically, if we look at Bitcoin’s Netflow metric, it peaked above -10,000 on June 7. It represented the highest flow recorded in the month. At the time of writing, Netflow remained on the negative side, surpassing 1,000.
Source: CryptoQuant
Ethereum’s Netflow also peaked into negative territory on June 5, reaching around -360,000, marking the highest flow for the month so far. At the time of writing, Netflow for ETH has already crossed 9,000 on the negative side.
Source: CryptoQuant
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Analyzing the current market sentiment
Mint glass data indicated that despite prevailing market sentiment, traders maintained a positive view of Bitcoin and Ethereum. This optimism is reflected in the funding rate metric, which showed that traders are betting on a price increase for these two assets. At the time of writing, the funding rate remained positive for BTC and ETH on most exchanges, reflecting prevailing sentiment among traders per Mint glass.