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The CEX.IO exchange, a top 10 crypto exchange according to CryptoCompare’s July rankings, has taken stock of the first half of 2020. Its analysts saw exceptional growth in the number of new users, significantly higher daily trading volume, and increased trader activity, in particular a 15-times shorter order filling time compared to last year, all despite the pandemic that has strained the global economy. 

According to CEX.IO’s analytics department, on March 12, 2020, the number of unique users on the platform reached its high point for the year. The exchange’s Executive Director, Konstantin Anissimov commented that

“on March 12, the Bitcoin exchange rate dropped sharply, from $8000 to below $5000, after the stock market crashed, and a day earlier the WHO had designated the COVID-19 outbreak a pandemic. The subsequent economic crisis resulted in a significant increase in the interest toward cryptocurrencies.”

Growth in Users and Daily Volume 

From February to May, the number of new users on CEX.IO rose continuously, and in May it was 1.5 times the January’s figure. Overall, the number of monthly signups has grown 80% from January to June. Constant growth was also observed in the average daily trading volume, whereas through all of 2019 volumes remained relatively flat. 

We are seeing a continuous increase in trust toward cryptocurrencies. On the one hand, more and more companies are starting to accept them as payment. On the other hand, people are now using digital currencies more often for their personal needs: as a savings vehicle and as a form of payment. 

The primary driver of these trends have been publications in traditional media, the Davos summit where the crypto market was widely discussed, and the adoption of the 5^th AML directive which is protecting the investors. The crypto market has felt the effects of the global recession in the last six months, but to a lesser extent than traditional financial markets. Right now, in a time of economic turmoil, digital currencies may represent an additional opportunity to diversify. 

“Cryptocurrencies attract investors as an alternative instrument. Recent market data shows a quite high return rate, considering that volatility has reduced substantially. Very low interest rates and hence low returns from traditional instruments, such as government bonds, index funds, etc., also lead to investors seeking out alternative options to invest their money into,”

added Konstantin.

Increased Trader Activity

During the first half of the year, CEX.IO saw increases in trader activity. For example, the average length of time over the past month between a placement and fulfillment of an order was about 20 seconds. For comparison, a year ago that figure was 5 minutes. It shows the decrease of the long-term limit orders’ dominance. What it means is, the market orders and the orders placed by the automated trading algorithms start prevailing. 

Out of all the traders, 66% are turning a profit for themselves. For traders who are active 70% of business hours, the average success rate increases to 73%. It was also noted that 95% of CEX.IO’s new customers place their first order through the platform on the same day they make their first deposit.

Bitcoin and Ether 

Bitcoin remains the cryptocurrency of choice for crypto enthusiasts. Over the last 2 years, the portion of CEX.IO’s customers that have at least 1 transaction involving BTC on the platform grew from 50% to 83%. Starting in February, there was stable growth in trading volume on the exchange, followed by a decrease in late May and June. 

According to the statistics, in 2020 the best day of the week to buy BTC is Friday, while the worst day is Thursday.

Ether is seeing the opposite: over the last 2 years, the portion of CEX.IO customers with at least 1 transaction involving ETH has dropped from 26% to 7%.

“People look at BTC first, and that is the currency they use for their so-called ‘first click.’ ETH is only the ‘second click,”

explains Mr. Anissimov. Nevertheless, at the end of July, Ether went through a rise of both popularity and price – which can be explained by the growing attraction of DeFi and the expectations regarding Ethereum 2.0. 

Alternative Cryptocurrencies

Interest in altcoins (alternative cryptocurrencies) remains high. They differ from the primary cryptocurrencies in larger jumps in price, which increases both the risks and the number of people interested in making money from those jumps. CEX.IO’s analysts comment that demand is growing for services involving trading and speculation.

Starting from when the pandemic began, USDT’s market share on CEX.IO has been steadily increasing. Among coins that have appeared on the platform within the last year, TRX and ADA have sparked particular interest among traders. ADA became the most popular coin among CEX.IO’s high volume users and saw the most growth out of the “newbie” coins in the first half of 2020. 

Overall, LINK had the largest increase in capitalization among coins in the first half of 2020, while XRP had the largest drop. XRP is a “corporate” token, so its price depends on corporate news. ADA’s success can be attributed to the fact that its audience shows a lot of interest in the coin, and its representatives work closely with their followers.

“The speculative portion of the value in most altcoins is quite high. I.e., a lot of motivation to buy them likely comes from the idea that their price may grow rather than from the utility of the tokens themselves,”

Konstantin explains.

CEX.IO’s analysis predicts that the recession may have a negative effect on the crypto industry as well, but in any case that effect will be delayed. If the global economy shows signs of recovery in the near future, the recession’s influence may prove practically insignificant for the crypto market. 

About the CEX.IO Exchange

CEX.IO was founded in 2013. It is now one of the largest international crypto exchanges, with 7 years’ experience in the crypto market, 3 million customers around the world, a team of 250 professionals, headquarters in London, and offices in the UK, US, Ukraine, Gibraltar, and Cyprus. The exchange serves market players at all levels, from beginner users to professional traders and financial institutions, with a multifunctional, reliable system for exchanging digital assets.

Konstantin Anissimov, Executive Director at CEX.IO:

Since August 2nd, Bitcoin entered a consolidation phase that saw its price make a series of higher lows. However, the infamous $12,000 hurdle continued to hold, absorbing any upward pressure. This price behavior led to the formation of an ascending triangle on BTC’s 4-hour chart.

Consistent with this technical pattern’s characteristics, a horizontal trendline was created along with the swing highs while a rising trendline formed along with the swing lows. As the overhead resistance became weaker over time, the flagship cryptocurrency was poised to break out in an upward direction. 

On Monday, August 17th, this happened. Bitcoin kicked off the day on a negative posture after being rejected by the $12,000 barrier. Its price plunged from a high of $11,921.32 to hit an intraday low of $11,780 by 2:00 UTC. But as buy orders began to pile up, it was evident that BTC was bound for a major price movement. 

Around noon, the pioneer cryptocurrency took another aim at the x-axis of the triangle. One hour later, this supply wall could not hold any longer, allowing Bitcoin to surge and achieve its upside potential. Prices shot up over 5% to reach a new yearly high of nearly $12,500. 

Although this price hurdle was able to hold igniting a 1.63% correction that saw BTC close the day at $12,298.06, the ascending triangle formation estimates prices are bound to advance further. By measuring the distance between the two highest points of this continuation pattern, it forecast that Bitcoin could rise towards $14,000. 

Ethereum Hits New Yearly Highs But Posts Negative Daily Returns

Investors seem to be growing overwhelmingly bullish around the upcoming Ethereum 2.0 upgrade. Given the boom in DeFi tokens, speculation is mounting around ETH’s potential to become the “world’s computer.” This sense of optimism can be seen in the number of positive ETH-related mentions across multiple social media networks, which recently reached a new all-time high. 

Even though increased levels of attention around a particular cryptocurrency is not necessarily a positive sign, it appears that Ether’s price is currently benefiting from the clout. On Monday, August 17th, the smart contracts giant was able to hit a new yearly high of $449, but getting there was not easy. 

The second-largest cryptocurrency by market capitalization opened the week at a high of $434.19. Nonetheless, it quickly entered a downward trend that saw its price plummet by more than 3% to hit an intraday low of $421.01. This support level seems to have been filled with a significant number of buy orders that allowed Ethereum to rebound. 

From that point on, ETH entered an uptrend, rising by 6.65% on value slicing through the previous yearly high of $445.66 to make a new one of $449. Investors seem to have taken advantage of the surging prices to realize profits, which cause Ethereum to retrace towards the end of the day. The substantial spike in selling pressure pushed prices down by 4%, and Ether closed at $431.31, providing a daily return of 0.66%. 

On the Cusp of a New Bullish Cycle

The recent price action by the top two cryptocurrencies by market capitalization suggests that a new bull market has begun. Although Bitcoin has yet to make a higher high by breaking above June 2019’s level of $14,000, everything seems to indicate that it is headed that way. Given the critical moment where the cryptocurrency market sits, market participants seem to be growing “extremely greedy.”

In the past, when “greed” reigned on the market, steep corrections followed. Therefore, it is imperative to be cautious when trading in this market and implement a strict risk management strategy. The idea behind it is to protect the investment capital in order to “buy the dip” in the event of a downturn.