Recent analysis by CryptoQuant analyst Axel Adler Jr reveals that spot trading volumes on centralized exchanges (CEX) have fallen to levels not seen since October 2020.
This significant drop indicates a notable shift in the market, as many crypto investors are opting to hold on to their assets rather than engage in active trading or move tokens on-chain.
Musk and Trump Stir Market Turbulence
The downturn in trading activity follows a week of heightened volatility, driven by macroeconomic factors and sensational events on social media. Bitcoin remained fairly stable until midweek when a public disagreement between Elon Musk and Donald Trump triggered notable market fluctuations.
The average spot trading volume on CEXs has dropped to October 2020 levels. Coins are not being sold on spot or moved on-chain — the market has shifted into HODL mode. pic.twitter.com/9bl1PejBVD
— Axel Adler Jr (@AxelAdlerJr) June 9, 2025
The high-profile clash between Trump and Musk has further fueled uncertainty in the crypto space. Both individuals have considerable sway over investor sentiments, especially in the tech and digital asset sectors.
This discord has stirred market unease, affecting volatility across a range of asset classes. Tesla’s stock experienced a significant drop, leading traders to prepare for possible changes in policy and regulatory approaches.
Markets were further shaken ahead of the anticipated US Non-Farm Payrolls report. Although Bitcoin briefly fell by 5%, it rebounded swiftly, buoyed by positive labor market figures.
Traders Pull Back as Risk Aversion Grows and Sell-Side Imbalance Builds
Despite the recovery, market indicators suggest a prevailing sense of caution. An analysis by Hyblock Capital shows a growing bearish trend in orderbook data.
The bid-ask ratio has now turned negative across spot and perpetual futures markets, indicating that sellers are more active in placing limit orders close to current prices than buyers. This trend historically precedes local peaks and short-term downturns in Bitcoin’s price.
Investor risk aversion is cited as a primary reason for the decline in CEX volumes. Following significant upheavals, including the FTX collapse in 2022 and intensified regulatory scrutiny of Binance and Coinbase in 2023, traders are increasingly wary.
Many are opting to transfer their assets from exchanges into long-term storage.
With DEX Adoption Rising, CEX Face Ongoing Outflows
Compounding this trend is the growing popularity of decentralized exchanges (DEX). As of May 2025, DEXs accounted for a record 25% of global spot trading volume, up from 20% earlier in the year. This increase is attributed to improved wallet functionalities and a rising discontent with centralized platforms.
The permissionless nature and customizable trading environments of DEXs are appealing features for more seasoned users.
Experts suggest that this current “HODL mode” is likely to persist unless there are significant changes in market sentiment or robust catalysts emerge to stimulate trading. Liquidity clusters have begun to form around the $107,000 mark, with key support below, potentially creating downward price pressure.
At present, muted trading activity coupled with growing caution shapes the current market atmosphere. With volatility lurking beneath the surface, traders seem more inclined to remain on the sidelines rather than pursue short-term profit opportunities.
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