Is Upbit only left with day trading? Bitcoin stagnant, but some altcoins fluctuate

▲ Upbit Coin Market, Investor Sentiment Rapidly Cooling/AI Generated Image ©

The domestic virtual asset market is struggling to find direction in a weak trading range amidst severe trading sluggishness. Bitcoin barely maintained the 89 million won level, but Upbit's 24-hour trading volume fell to around 500 billion won. A rotational trading pattern, where short-term funds concentrate on some small and medium-sized altcoins rather than trend trading across the entire market, was prominent.

According to Upbit on the 16th, as of 10:31 AM on that day, Bitcoin was trading at 89,228,000 won, down 0.02% from the previous day. The high for the day was 89,273,000 won, and the low was 89,166,000 won, with an intraday fluctuation range of only 107,000 won.

Bitcoin's 24-hour trading volume also remained at approximately 19.34 billion won. Although the price maintained the 89 million won level, there were no signs of a rebound accompanied by trading volume.

At the same time, the Upbit Composite Index recorded 9,247.89, virtually unchanged from the previous day. The Upbit Altcoin Index fell 0.01% to 2,352.38, and the Upbit10 Index, composed of top market capitalization assets, showed a 0.01% decrease to 2,213.59.

The Bitcoin group rose by 0.01%, but the Ethereum group fell by 0.04%. The Upbit30 Index also decreased by 0.01%. With all major indices remaining within a range of less than ±0.1%, there is a clear lack of direction in the overall market.

◇ Upbit Trading Volume 549.2 Billion Won…Significantly Below 1 Trillion Won

A more noticeable indicator than price is trading volume.

According to Upbit Data Lab, as of 10:32 AM, Upbit's recent 24-hour trading volume was recorded at 549.21 billion won. This represents a 27.59% decrease from the previous 24 hours, significantly falling short of 1 trillion won. The cumulative trading volume from midnight to 10:32 AM on that day was only 61.897 billion won.

The decrease in trading volume was primarily influenced by seasonal factors, specifically it being a Sunday. During weekends, with domestic and international stock markets and major institutional investors at rest, there is a tendency for new funds flowing into the virtual asset market to decrease. Additionally, both active buying and selling are believed to have contracted ahead of major macroeconomic events.

With market liquidity reduced, trading concentrated on a few select assets. In the last 24 hours, Tether accounted for the highest proportion of Upbit's trading volume at 10.61%, followed by Cow Protocol at 8.60%, Cap at 7.87%, Wallrus at 5.63%, and Pearl at 5.44%. The top 5 assets accounted for 38.15% of the total trading volume.

The concentration of trading on Tether and some small and medium-sized altcoins rather than on Bitcoin, the representative asset, is interpreted as a sign that the market quality is not strong. This is because it resembles a rotational trading environment where funds quickly move between assets with short-term issues, rather than spreading across the entire market.

◇ Cap Surges 58% Weekly…Cow Protocol Down 9% in a Day

In the altcoin market, asset-specific sharp fluctuations continued.

On Upbit's KRW market, Cap ranked first in weekly gains, rising 58.56% over the past week. Pearl increased by 38.86%, USDAI (CHIP) by 29.41%, Etherfi by 25.14%, and Cow Protocol by 22.97%.

Ontology Gas and Chainlink also rose by 16.67% and 16.23% respectively, while Ree, Definitive, and ZeroG recorded gains in the 13-15% range.

However, the daily trend differed from the weekly returns. As of 10:31 AM, Cow Protocol fell by 9.00%, Wallrus by 4.87%, Prom by 3.79%, Home by 2.38%, and DepOS by 2.03%. Conversely, Pearl rose by 5.18%, while Cap and Ontology Gas increased by 0.34% and 0.28% respectively.

It appears that profit-taking emerged from some of the recently surged assets, leading to mixed fortunes among them. Caution is advised for trading that solely chases rising prices, as low trading volumes on weekends can cause significant price movements even with small buy or sell orders.

◇ Why is Bitcoin Stagnant? "Lack of Reasons to Buy or Sell"

Bitcoin's stagnation is analyzed as a result of a lack of conviction from both buyers and sellers.

Firstly, the so-called 'Kimchi Premium,' which indicates strong buying sentiment among domestic investors, is not evident. The converted prices from overseas exchanges displayed on Upbit's screen were approximately 180,000 to 190,000 won higher than Upbit's price, with Binance at 89,416,717 won and Coinbase at 89,420,344 won.

A simple comparison shows that Upbit's Bitcoin price is about 0.2% lower than overseas exchanges. While differences in price calculation times and exchange rates between exchanges must be considered, it is difficult to say that strong follow-up buying is occurring in the domestic market.

The KRW/USD exchange rate also fell by 0.12% to 1,418.50 won. When the dollar-denominated Bitcoin price remains stable, an appreciation of the Korean won can create slight downward pressure on the won-converted Bitcoin price.

Macroeconomic uncertainty is also fostering a wait-and-see attitude. The market is awaiting the release of the US Federal Open Market Committee (FOMC) minutes on the 19th. Once it is confirmed to what extent opinions on interest rate hikes spread during the July meeting, the short-term direction of the dollar, US Treasury yields, and Bitcoin could change.

The extension of the ceasefire between the US and Iran is also a variable. If tensions escalate again, leading to a rise in international oil prices, concerns about inflation and US interest rate hikes could grow. This could burden the liquidity-sensitive virtual asset market.

◇ Trading Not Reviving Despite Expanded Listings…Beware of Short-Term Concentration Side Effects

Upbit has recently been rapidly expanding support for new virtual asset trading. According to industry figures provided, Upbit added 8 assets to the KRW market, 11 to the Bitcoin market, and 13 to the Tether market this month. The number of new trading support cases in the KRW market this year totaled 59.

New assets have the effect of attracting investor attention immediately after listing, temporarily increasing trading volume. Indeed, even today, overall trading was concentrated on Tether, Cow Protocol, Cap, Wallrus, Pearl, and others.

However, the fact that the total 24-hour trading volume remained at around 500 billion won indicates that it is difficult to resolve the overall market's trading sluggishness solely through rotational trading focused on new assets. It suggests that funds may have merely shifted from existing assets to new or surging ones, rather than new capital sufficiently entering the market.

There is also a risk of a repeated 'listing pump,' where prices surge immediately after new trading support and then quickly fall. In a situation of decreasing trading volume, if orders concentrate on a specific asset, both upward and downward price fluctuations can be amplified.

Considering the provided data that trading fees accounted for 97.49% of Dunamu's first-quarter revenue this year, the recovery of trading volume is a crucial variable for Upbit's performance. However, it is also necessary to observe how the expansion of trading support will affect not only short-term trading volume but also listing criteria and market trust.

◇ Outlook…'Trading Volume Recovery' Before '90 Million Won Recovery'

In the future, the key indicator for determining whether the domestic coin market will rebound is expected to be Upbit's trading volume rather than Bitcoin's price.

If Bitcoin defends the 89 million won level and even surpasses 90 million won, but trading volume continues to fall below 1 trillion won, the sustainability of the uptrend could be limited. Conversely, if the overall trading volume increases and the proportion of trading in major assets like Bitcoin and Ethereum also expands, it can be seen as a sign of recovering investor sentiment across the market.

In the short term, it is important for Bitcoin to hold the day's low of around 89.16 million won and the psychological support level of 89 million won. If these price levels break down, the decline could intensify due to the thin trading characteristics of the weekend market.

On the upside, the key is whether it recovers and stabilizes above 90 million won. However, a meaningful rebound can only be assessed if an increase in trading volume and a simultaneous rise in the Upbit Composite and Altcoin indices are confirmed, rather than just a temporary price vượt 90 million won.

The altcoin market is likely to see a selective trading environment for some time. With repeated profit-taking on weekly surging assets and fund movements to new trending assets, double-digit fluctuations could occur even on the same day.

Currently, the Upbit market faces a greater problem of 'lack of trading' than 'price stability.' It is difficult to assess the market as robust simply because Bitcoin is maintaining the 89 million won level. The situation where trading volume has decreased to around 500 billion won and 38% of trading is concentrated on the top 5 assets indicates that investors are focusing on short-term asset trading rather than an overall market upswing.

If this week's FOMC minutes and the Middle East situation do not unfold favorably for risk assets, Upbit's trading drought and Bitcoin's stagnation are likely to continue for some time.

*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.*