In a recent disclosure, Bloomberg shed light on the causes behind the noteworthy decline in Bitcoin, ETH, SOL, XRP, and SHIB prices, attributing this phenomenon to diminished trading volumes across various cryptocurrency exchanges. The market turbulence was driven by prevailing inflation concerns and a cloud of uncertainty hovering over the crypto landscape.

During the month of April, major cryptocurrency exchanges bore witness to a notable reduction in trading volumes, a downturn that breaks a streak of seven months marked by continuous trading activity. This decline coincided with Bitcoin's sharp descent from its historical pinnacle of $73,800, an event cited by Bloomberg as a tipping point in the fluctuations witnessed in the market.

The trend of dwindling trading volumes extended into the month of May, impacting both spot and derivatives trading activities, resulting in further downturns in Bitcoin and alternative coin prices. Bitcoin, in particular, experienced a drop to $60,400 against a backdrop of commentary from Federal Reserve officials and new inflation forecasts that hinted at a hesitancy towards potential rate cuts, casting a shadow of uncertainty over the cryptocurrency realm.

Diminished Trading Volumes Amid Macro Concerns
Data sourced from CCData highlighted a substantial 32.6% downturn in spot trading volume on key centralized exchanges such as Coinbase, Binance, and KuCoin, amounting to $2 trillion in the month of April. Concurrently, derivatives trading volumes witnessed a 26.1% decline, totaling $4.57 trillion, marking the initial decline in trading activities in seven months. The prelude to this decline was a surge in trading volumes earlier in the year, propelled by the approval and listing of US spot Bitcoin exchange-traded funds (ETF) in January. However, this surge failed to translate into a significant price upsurge or market rejuvenation following the Bitcoin halving on April 19, as prices slid below the $60,000 mark.

Jacob Joseph, a research analyst at CCData, emphasized the cyclical nature of trading activities on centralized exchanges post-Bitcoin halving events, noting the consistent pattern observed over the past two cycles. The concerns surrounding inflation and stagflation at the U.S. Federal Reserve, alongside heightened CPI inflation figures, geopolitical tensions in the Middle East, and apprehensions surrounding potential bank runs, collectively contributed to a climate of market ambiguity and trepidation. This shift in sentiment culminated in negative net flows from spot Bitcoin ETFs, reflecting investor unease and market caution.

Subdued Trading Volumes at Binance and CME Group
Binance, recognized as the globe's largest cryptocurrency exchange, observed a noteworthy 4% decline in its spot market share to 33.8%, marking the first dip observed since September 2023 as trading volumes witnessed a substantial drop. Similarly, CME Group, renowned as the largest Bitcoin derivatives exchange, encountered nearly a 20% decrease in crypto trading volume, amounting to $124 billion.

Joseph underscored the sustained elevation in trading activities on centralized exchanges, highlighting the continuing vibrancy compared to levels witnessed in other months, even though a slowdown from the peak activities in March was evident.

BTC Price Projection and Market Uptick
Following a breakout above the trendline, Bitcoin's price experiences a resurgence from $60,630 to $62,585 within mere hours post breaching a descending trendline spanning three days. The price catapulted to a zenith of $63,446, concurrently witnessing other altcoins like ETH, SOL, XRP, DOGE, and SHIB observing rebounds.

Despite the recent resurgence in prices, lingering concerns abound regarding a potential retracement, predominantly owing to pending options expiry and forthcoming economic data releases. A breakout above the descending channel observed since mid-March could potentially signal a bullish trajectory for BTC, potentially propelling it towards $100,000 and activating a broader rally across the cryptocurrency market.