Frozen Upbit, Trading Volume Plummets 34%... Is This the Bottom?

▲ Upbit/AI generated image ©

As the New York stock market closed down, led by tech stocks, pressured by fundamental concerns over leading artificial intelligence (AI) stocks and persistent inflation fears, Upbit, the largest virtual asset exchange in Korea, is also facing severe repercussions. With major coins plummeting across the board and trading volume sharply decreasing amid a strong wait-and-see sentiment, a chill is blowing through the market.

As of 6:42 AM on the 29th, in Upbit's KRW market, the leading cryptocurrency Bitcoin (BTC) is trading at 113.56 million KRW, down 1.54% from the previous day, failing to avoid weakness. The leading altcoin Ethereum (ETH) is down 0.84% to 3.405 million KRW. XRP (Ripple) fell 1.72% to 2,052 KRW, and Solana (SOL) dropped 1.50% to 124,500 KRW, with most top market cap assets showing red.

The market's extreme wait-and-see attitude is clearly evident in the shrunken trading volume. According to CoinGecko data, a global virtual asset market aggregator, Upbit's 24-hour trading volume at the same time plummeted by a staggering 34.8% from the previous day, reaching only about $1.08215 billion. While major coins are huddling, having lost direction, speculative funds are flocking to specific assets, leading to a distinct altcoin selective market, with Bio-Protocol (BIO) showing gains in the 26% range, Pearl (PRL) in the 10% range, and Orca (ORCA) in the 6% range within Upbit's KRW market.

This sharp market decline and contraction in investor sentiment on Upbit align with the negative factors that hit the New York stock market overnight. News that OpenAI, the developer of ChatGPT, failed to meet new user acquisition and revenue targets, coupled with internal concerns over managing the enormous costs of AI data centers, shook the entire tech sector. As the Nasdaq index fell 0.90%, AI and semiconductor-related stocks such as Nvidia (-1.6%), Broadcom (-4.4%), AMD (-3.4%), and Micron (-3.9%) all plummeted, rapidly freezing investor sentiment in the risky virtual asset market.

Geopolitical risks and inflation fears, which are tightening the macroeconomic environment, also increased downward pressure on the crypto market. Despite news of the United Arab Emirates (UAE) withdrawing from OPEC, discussions for an end to war between the US and Iran reached a stalemate, further exacerbating supply chain instability. Consequently, Brent crude surged to $111.26 per barrel and West Texas Intermediate (WTI) to $99.93, crushing market expectations for interest rate cuts.

Market experts anticipate that the virtual asset market, including Upbit, will fluctuate without a clear direction for the time being, largely influenced by macro events. With the benchmark interest rate likely to be frozen at 3.50-3.75% at the ongoing US Federal Open Market Committee (FOMC) meeting, Federal Reserve Chair Jerome Powell's remarks on the high oil price situation and future policy direction will be key to short-term volatility. However, with earnings announcements from major big tech companies like Alphabet, Microsoft, Amazon, Meta, and Apple lined up, it remains to be seen whether their strong performance could be the last spark to reverse the frozen sentiment in the virtual asset market.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*