Binance, Coinbase Traffic Down 30%… Is This a Bearish Sign?

According to a new report on February CEX data, the traffic of Binance and Coinbase has decreased by almost 30%. The decline in spot and derivatives trading volume also reflects the unease of retail investors. While these two companies appeared to have made positive strides in February, they still underperformed compared to their competitors. The bearish factors in the cryptocurrency market could lead to a contraction. Binance and Coinbase are lagging behind most other CEXs Central Exchanges (CEXs) are an important part of the cryptocurrency economy and a key indicator of its health. By the end of 2024, CEX trading volume is expected to surge, reaching $6.4 trillion in the fourth quarter. However, the broader market downturn is taking its toll. A new report shows that CEX traffic has plummeted, with major players like Coinbase and Binance approaching 30% losses. The overall CEX traffic across the industry has declined by around 20%, with Binance and Coinbase being clear outliers. To be fair, the two companies slightly outperformed the CEX average in spot trading volume. Nevertheless, user traffic is a crucial metric for exchanges. The significant underperformance compared to most competitors is concerning. One of the world's largest CEXs, Coinbase, experienced an even greater decline in February than Bybit, which became the victim of the largest crypto hack in history at the end of February, leading to a rapid drop in traffic. While a significant number of users shifted to Binance by March, this may not have been fully realized in February. It is still puzzling that Coinbase is on par with the likes of Bybit in terms of CEX traffic, as the company should be doing well after the SEC dropped its major lawsuit. Binance also received positive news, opening a community vote for the listing of the Pi Network, which led to a policy shift in March. The decline in CEX traffic and trading volume could be a bearish signal. While OKX grew by 15% and Bitget by 6%, most major exchanges saw significant decreases. This indicates a decrease in the market's appeal to retail investors. Weak investor sentiment persisted for 4 weeks in March, with US investors leading the market sell-off. While Binance and Coinbase received positive news, this was not enough to counter the broader trend affecting all CEXs. Even though Coinbase resolved its legal issues, the new political influence did not help its position. In terms of traffic, Binance gained a slight advantage after the Bybit hack, but its listing policy remains controversial, and the underlying market is in a state of fear.