Crypto Assets volume big dump 27%! CEX monthly transaction 1.6 trillion hits a six-month low.

In November, the trading volume of Centralized Exchanges (CEX) for Spot decreased to $1.59 trillion, down from $2.17 trillion in October, a drop of 26.7%, marking the lowest trading volume since June's $1.14 trillion. Binance maintained the top trading volume in November at $599.34 billion, but it significantly fell from $810.44 billion in October. Gate had $96.75 billion.

Binance leads the decline reflecting the overall industry pullback trend

(Source: The Block)

Binance's trading volume in November still ranks first, reaching $599.34 billion. However, this figure represents a significant decline from October's $810.44 billion, reflecting a pullback trend across the entire industry. As the world's largest cryptocurrency exchange, Binance's trading volume changes are often seen as a barometer of overall market activity. The drop from $810.44 billion to $599.34 billion represents a decrease of approximately 26%, nearly consistent with the overall CEX market's decline of 26.7%, indicating that this is not just a problem for Binance but a systemic contraction across the entire industry.

Gate follows closely with $96.75 billion, while the largest compliant cryptocurrency exchange in the United States stands at $93.41 billion. It is worth noting that the rankings of these exchanges are relatively stable, but the absolute trading volumes have all seen a significant decline. This consistent downward trend indicates that the shrinkage in cryptocurrency trading volumes is not due to changes in the competitive landscape (such as users migrating from one exchange to another), but rather a decrease in overall market participation.

November CEX volume ranking

Binance: $599.34 billion (October: $810.44 billion, a decrease of 26%)

Gate: 96.75 billion USD

The largest compliant crypto exchange in the United States: 93.41 billion USD

Kronos Research Chief Investment Officer Vincent Liu told The Block: “As the market transitions from the frenzy of October to the stability of November, the current trading volume of Centralized Exchanges is declining, volatility is disappearing, and momentum is weakening. Most of the declines stem from profit-taking after the rebound and the compression of trading space, which is a typical case of traders coming down after a crowded upward market.”

This analysis highlights the core reason for the shrinkage in cryptocurrency trading volume: The frenzy in October created excessive trading activity, while November saw a natural return from this frenzy. In October, Bitcoin's price broke historical highs, and the market was filled with FOMO sentiment, leading a large number of investors to rush into trading. However, when prices entered a consolidation phase or retraced, trading motivation weakened, and many short-term traders chose to stand by or exit the market.

The disappearance of volatility is a key factor in the decline of volume. Cryptocurrency traders, especially short-term traders and arbitrageurs, rely on price fluctuations to profit. When the market enters a low-volatility range, trading opportunities decrease, and volume naturally shrinks. Although Bitcoin's price in November fell from around $110,000 at the beginning of the month to nearly $81,000 on November 21, this decline was mainly concentrated in a few days in the middle of the month, with the price remaining relatively stable for the rest of the time.

DEX volume is shrinking and market activity is concentrating towards CEX

According to DefiLlama data, the trading volume of decentralized exchanges (DEX) in November also dropped to $397.78 billion, down from $568.43 billion in October. This is the lowest monthly cryptocurrency trading volume for DEX since June. Among decentralized exchanges, Uniswap had the highest trading volume in November at $79.98 billion, down from $123.88 billion in October. PancakeSwap followed closely behind with a trading volume of $70.57 billion, down from last month's $102.02 billion.

The decline in DEX volume (approximately 30%) is slightly higher than that of CEX (26.7%), and this difference reveals the behavioral patterns of different types of traders. DEX users are typically more professional native cryptocurrency traders who are more sensitive to market trends and DeFi yield opportunities. When market momentum weakens, these traders tend to reduce their activity frequency faster or shift to other strategies.

According to data from The Block, the trading volume ratio of DEX to CEX dropped to 15.73% in November, down from 17.56% in October, indicating a further shift in market activity towards Centralized Exchanges. Liu from Kronos stated, “The decrease in the DEX to CEX ratio is more influenced by structural factors rather than market sentiment. The narrower trading range in November favors CEX, as CEX has stronger liquidity, smaller spreads, and higher execution efficiency. At the same time, the reduced flow of speculative funds and weakened DeFi incentive rates have led to the DEX exchange mechanism, further exacerbating this trend.”

A narrower trading range means limited price fluctuations, and in this environment, professional traders prefer to trade on liquidity-rich CEX. Although DEX offers the advantages of decentralization and no KYC requirements, it typically does not match the liquidity and spreads of large CEXs. When market volatility decreases, the importance of spreads increases, as the profit margin for trades is compressed, and every basis point of spread can impact the final returns.

The weakening of DeFi incentive rates is another important factor. Many DEX attract users through liquidity mining and trading rewards, but as the token economic models mature and the overall market yields decline, the appeal of these incentives is diminishing. When the annualized yield of liquidity mining drops from triple digits to single digits, many DeFi users choose to reduce their activity frequency or withdraw their funds.

Bitcoin price correction and ETF fund outflow

The cryptocurrency market generally declined in November, with the price of Bitcoin dropping from about $110,000 at the beginning of the month to a low of nearly $81,000 on November 21. According to The Block's pricing page, as of 11:20 PM Eastern Time on Sunday, the world's largest cryptocurrency, Bitcoin, fell 4.6% in the past 24 hours to $86,500. This price correction directly affected market sentiment and cryptocurrency volume.

From $110,000 to $81,000, the price of Bitcoin has retraced about 26%. Such a degree of pullback is not uncommon in the cryptocurrency market, but considering that Bitcoin has just broken through its historical high and reached the $110,000 milestone, the psychological impact of this retracement is even more significant. Many investors who bought at high levels are facing losses, and the liquidation of profit-taking positions has also intensified the selling pressure. Although such drastic price fluctuations should theoretically stimulate trading activity, in reality, when prices continue to fall, many investors choose to stand on the sidelines rather than trade, leading to a contraction in trading volume.

In November, the Spot Bitcoin Exchange-Traded Fund (ETF) also experienced capital outflows exceeding inflows. According to data from SoSoValue, the net outflow for the U.S. Spot Bitcoin ETF in that month was $3.48 billion, compared to a net inflow of $3.42 billion in October. This marks the largest single-month capital outflow since February. This data is highly indicative, as Bitcoin ETFs represent the attitude of institutional and traditional investors.

From a net inflow of $3.42 billion to a net outflow of $3.48 billion, this represents a nearly $7 billion reversal in fund flows. This reversal may stem from multiple factors: profit-taking (investors who bought in October cashing out around $110,000), a decline in risk appetite (increased macroeconomic uncertainty leading investors to reduce allocations to risk assets), and cautious expectations for the future (concerns over a further pullback in Bitcoin prices).

Market Silence Period After Profit Taking

Vincent Liu's analysis points out that “most of the decline is due to profit-taking after the rebound and the compression of trading space, which is a typical case of traders coming down after a crowded uptrend.” This statement reveals the nature of the periodic fluctuations in cryptocurrency volume. The frenzy in October created excessive trading, while the calm in November is a natural adjustment of the market.

Profit-taking is the main reason for the decline in cryptocurrency volume. During the bullish trend in October, a large number of investors made substantial profits. When the price reached 110,000 USD, many investors chose to take profits and exit. This concentrated selling activity temporarily boosted the volume, but the market then entered a wait-and-see period, causing the volume to naturally shrink. The compression of trading space refers to the narrowing of the price fluctuation range, resulting in fewer trading opportunities.

This is a typical case of traders coming down after a crowded bullish market. “Crowded” means that too many traders are taking the same strategy (going long), and when the trend reverses or stagnates, these traders will exit en masse, causing short-term volatility. The market then enters a quiet period, waiting for new catalysts or the formation of a trend. This kind of periodic volume fluctuation is common in the cryptocurrency market.

Historically, the periods of low cryptocurrency trading volume typically do not last long. When prices stabilize and new narratives or catalysts emerge, trading activity tends to recover quickly. December is usually an important month for the cryptocurrency market, as year-end asset reallocation, tax considerations, and expectations for the New Year market can all stimulate a rebound in trading volume.