Bloomberg disclosed that Bitcoin, ETH, SOL, XRP, and SHIB prices experienced a significant drop due to reduced trading volumes on crypto exchanges, driven by inflation fears and market uncertainty.

In April, the trading volumes on major crypto exchanges witnessed a substantial decline, marking the first decrease in seven months. This decline coincided with Bitcoin's price plunge from its record high of $73,800, as reported by Bloomberg on Friday.

The trend continued into May, with spot and derivatives trading volumes dwindling, leading to further declines in Bitcoin and altcoin prices. Bitcoin's price fell to $60,400 amidst comments from Fed officials and new inflation forecasts that hinted at a reluctance for rate cuts.

Decrease in Trading Volumes Amid Macroeconomic Concerns

Spot trading volume on prominent centralized exchanges like Coinbase, Binance, and KuCoin dropped by 32.6% to $2 trillion in April, according to data from CCData. Additionally, derivatives trading volumes also fell by 26.1% to $4.57 trillion, marking the first decline in seven months.

The surge in trading volumes earlier in the year, driven by the approval and listing of US spot Bitcoin exchange-traded funds (ETF) in January, did not translate into a significant price increase or market recovery following the April 19 Bitcoin halving, with prices slipping below $60,000.

Jacob Joseph, a research analyst at CCData, noted, "Consistent with patterns observed in the last two cycles, trading activity on centralized exchanges typically slows in the two months following the Bitcoin halving event."

Furthermore, concerns surrounding inflation and stagflation at the U.S. Federal Reserve, coupled with hotter CPI inflation data, tensions in the Middle East, and potential bank run fears, contributed to market uncertainty and fear. This sentiment shift led to negative net flows from spot Bitcoin ETFs.

Low Trading Volumes at Binance and CME Group

Binance, the world's largest crypto exchange, saw its spot market share decline by 4% to 33.8%, the first drop since September 2023, as trading volumes significantly decreased. Similarly, CME Group, the largest Bitcoin derivatives exchange, witnessed a nearly 20% decline in crypto trading volume to $124 billion.

Joseph highlighted, "While trading activity on centralized exchanges has slowed compared to its peak in March, it remains elevated compared to volumes seen in other months."

BTC Price Outlook and Market Recovery

Following a breakout above the trendline, Bitcoin's price rebounded from $60,630 to $62,585 within hours after a 3-day descending trendline was breached. The price surged to a high of $63,446, with other altcoins like ETH, SOL, XRP, DOGE, and SHIB also experiencing rebounds.

Despite the recent recovery, concerns about a potential pullback persist due to upcoming options expiry and economic data releases. A breakout above the descending channel since mid-March could signal a bullish trend for BTC, potentially reaching $100,000 and triggering a broader crypto market rally.