Spot volume plunge and stablecoin outflows push crypto market toward $2.86T test

Spot trading volume plunged in January as investors reduced market participation, pushing total centralized exchange volume to $1.118 trillion for the month, with Binance accounting for more than $490 billion, according to Newhedge; unless a late rebound occurs, that would be the lowest monthly volume since July last year.

On-chain retail activity has also weakened: CryptoQuant’s Retail Investor Demand (transactions below $10,000) has fallen sharply since August, and analyst Caueconomy said risks such as a potential U.S. government shutdown and yen carry trade concerns have pushed investors into a defensive stance, reducing trading and new investments.

Stablecoin indicators show capital leaving the market: CryptoQuant’s ERC-20 stablecoin market cap declined in January and stablecoin reserves held on exchanges dropped significantly, which the outlet said suggests funds are exiting rather than rotating within crypto. The total crypto market capitalization fell below $3 trillion in January and is approaching a crucial support level around $2.86 trillion that several analysts have highlighted; TradingView data shows the market cap nearing a trendline that has held since 2024 and a breakdown could trigger a bear market similar to 2022.

Macro conditions add mixed signals: the U.S.

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