Low Volume and Liquidity in the Crypto Market: Cause-and-Effect Summary

Although the total value of the cryptocurrency market seems high, the fact that trading volumes are 60-70% lower than in the past points to a liquidity problem (i.e. the ability to easily buy and sell assets).

Reasons:

* Bear Market and Lack of Confidence: The market is experiencing a general decline or period of uncertainty (bear market). This causes investors to avoid taking risks and hesitate to make new transactions.

* Macroeconomic Concerns: Global economic problems such as high inflation and interest rate hikes by central banks are driving investors away from risky assets such as crypto and towards safer havens.

* Regulatory Uncertainty: The fact that the crypto market still does not have clear laws prevents large institutional investors in particular from fully entering the market.

* Past Negative Events: Major exchange bankruptcies such as FTX have made investors more cautious and prevented them from making hasty transactions.
Results:

* High Volatility and Manipulation Risk: Lack of liquidity can cause prices to change suddenly, even with small buy or sell orders. This makes the market more open to manipulation.

* High Transaction Costs: The widening of the price difference (spread) between the buyer and seller increases transaction costs.

* Decrease in Investor Confidence: These fluctuations and uncertainty in the market further reduce investors' confidence in crypto, preventing new entries.

In short, current market conditions and economic factors cause investors to remain more passive. This reduces trading volumes, making the market less liquid and more volatile.