'Boring' crypto market? Trading data suggests anything but

This week, the crypto trading landscape appears to be stagnant, even boring, as the major currencies trade sideways or droop slightly. Neither bulls nor bears appear to have the upper hand, and the cryptocurrency space is quiet, lacking the exciting volatility that made overnight millionaires in the past.

However, a recent analysis highlights how, when one takes a longer-term view, the cryptocurrency market is in very good health, with plenty of activity under the surface. Analytics firm CoinShares just released a report showing that, although the crypto market only generated $11.2 million in outflows these past seven days, trading volumes in digital assets have, in fact, surged by 90% above the year-to-date average, reaching $2.8 billion during the same period.

James Butterfill, head of research at CoinShares, likened the situation to a duck, explaining that on the surface, there seems to be little happening, but underneath, there's a flurry of activity.

These numbers can be attributed to the roller coaster of legal and emotional fluctuations that characterised the crypto market last week. Grayscale achieved a victory when it won its legal appeal against the US Securities and Exchange Commission (SEC), allowing the company to convert its Bitcoin trust into an ETF. However, this celebration was short-lived as the regulatory agency delayed several spot Bitcoin ETF applications, including BlackRock's. In this time of uncertainty and small-but-not-total victories, it's no wonder that investors are cautious.

The report from CoinShares reveals that large entities have been selling for the seventh consecutive week, amounting to $342 million. Despite this short-term downtrend, 2023 has been positive overall. The year has been shaped by both hopes and concerns regarding crypto regulations, with entities acquiring $165 million worth of digital assets.

Bitcoin has reversed its direction, albeit without any remarkable figures. Following a challenging August, the largest cryptocurrency experienced inflows of $3.8 million in the past week.

Butterfill pointed out that this week's relatively low institutional flows indicate a polarisation of opinions among investors. Some view the SEC's delay as negative news and are selling, while others see the price weakness as a buying opportunity. However, it appears that investors have stopped shorting Bitcoin for the first time in almost three months, suggesting that the world's leading cryptocurrency is expected to recover.

Bitcoin (BTC) is currently trading at $25,853, down just over 1% this last week. Most altcoins experienced outflows, with Polygon (MATIC) and Ethereum (ETH) leading the way at $8.6 million and $3.2 million, respectively.

In terms of geographical trends, Germany saw the most outflows at $26.9 million, while Switzerland emerged as a positive counterpart with $14.8 million in purchases. Other countries, such as the United States and Canada, reported relatively minor buying activities, with $1.9 million and $0.4 million, respectively.

As the summer lull dissipates, these figures could inspire traders and investors to anticipate a fourth quarter with more significant market movements and a return to the thrilling volatility that has characterised the crypto market in the past.

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