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The bitcoin price has hit a new annual low this morning, leaving traders and investors looking for answers while the cryptography market seeks a fund. While there are numerous pressures that have weighed on bitcoin since it took last year's historical maximum step by step, CryptoCompare's research suggests that the South Korean cryptocurrency Bithumb could have contributed to the recent sell-off – at least indirectly.
According to the company's last CCCACG (short for CryptoCompare's Aggregate Pricing Index), Bithumb drove all crypto trades in daily volumes from October to November, with an average of about 1.24 billion dollars of daily turnover. This represented a month-over-month parabolic increase of 284%, although Binance, the maximum global trading weight, suffered a 34% decline in volume terms.
Not surprisingly, Bithumb's volumes were not entirely organic, which is why CoinMarketCap and other data aggregators continue to list Binance as the world's highest cryptocurrency exchange. Rather, the increased volumes of Bithumb were related to various commercial promotions, "Super Airdrop Festival" and "Special Gift." These promotions seem to have allowed Bithumb to increase the daily volume – and the importance of KRW trading in the cryptographic spot market – even when the number of active operators has decreased significantly, according to the analysis of web data.
From the report:
"Bithumb has seen a 284% increase in volumes compared to the previous average of $ 323 million for the period September / October.This volume increase follows after the BK Global consortium in Singapore has acquired a controlling stake in trade in the last months and then implemented a series of aircrafts, lotteries, discounts and other programs designed to encourage non-Korean users to sign up for exchange and trade in exchange for rewards.They also implemented a potential form of cross-fee mining for certain users, where trading over a certain volume is rewarded in the form of "Bithumb Cash" at a later date. "
As CCN has noted in the past, higher trading volumes tend to correlate with a strong bitcoin price, while lower volumes tend to accompany gradual downward movements. As a result, the fact that Bithumb, along with many other lesser-known exchanges, has managed to increase the daily business turnover even though their restrictive active bases may indicate that these commercial promotions have helped the bitcoin price to remain stable. over $ 6,000 longer than the technical and fundamental factors suggest it should have.
For example, the first bitcoin break below $ 6,000 occurred shortly after the end of one of Bithumb's commercial promotions, at which point the market took a serious downward trajectory from which it has so far failed to recover.
Commenting on the report, Mati Greenspan, eToro senior market analyst, said that while Bithumb should not be blamed for the recent fall in bitcoin prices, the promotion of crypto trading may have helped the market remain stable longer than he would not have otherwise.
"If these results are really accurate, I would say that blaming South Korea for the fall would not be exactly correct," wrote Greenspan in the daily commentary on the market shared with CCN. "More likely, it seems that the promotion of Bithumb's volume has caused several months of price stabilization, to begin with".
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