Coinbase is predicting that the downward trend recorded in the crypto market in the second quarter (Q2) is likely to continue into the third quarter (Q3).
According to Coinbase, two metrics are sending warnings on the likely fortunes of the crypto exchange during the third quarter – trading volumes and the number of monthly transacting users (MTUs).
“Soft crypto market conditions from Q2 are continuing into Q3 and are reflected in our Q3 outlook…
July MTUs declined to 8.0 million. Accordingly, we expect MTUs to be lower in Q3 compared to Q2 and for a higher portion of MTUs to be non-investing users compared to investing users compared to Q2…
July trading volume of $51 billion reflected a continuation of the trends discussed above. If these trends continue, we believe Q3 will be lower compared to Q2.”
According to Coinbase, one of the reasons trading volumes are falling is because of the number of users holding to their crypto with diamond hands and refusing to sell.
The exchange’s users are following a trend that’s established itself worldwide.
“A recent blockchain industry analysis highlighted in our revealed that worldwide long-term BTC holders (those holding BTC for more than six months) are holding approximately 77% of total BTC supply, indicating they are not selling into market volatility. We view this as a positive signal of conviction.
We are seeing a similar trend at Coinbase where the percentage of users continuing to hold BTC and ETH for extended periods of time is similar to levels observed during the 2018-2019 crypto market downturn.”
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