The bitcoin price touched a fresh yearly low this morning, leaving traders and investors scrambling for answers as the crypto market searches for a bottom. While there are numerous pressures that have weighed on bitcoin as it has taken step after step away from last year’s all-time high, research from CryptoCompare suggests that South Korean cryptocurrency exchange Bithumb may have contributed to the recent sell-off — at least indirectly.

According to the firm’s latest CCCACG (short for CryptoCompare’s Aggregate Pricing Index), Bithumb led all crypto exchanges in daily volume from October to November, averaging about $1.24 billion in daily turnover. That represented a parabolic month-over-month increase of 284 percent, even as global exchange heavyweight Binance endured a 34 percent decline in volume.

Unsurprisingly, Bithumb’s volumes were not entirely organic, which is why CoinMarketCap and other data aggregators still list Binance as the world’s highest volume cryptocurrency exchange. Rather, Bithumb’s increased volumes correlated with several trading promotions, “Super Airdrop Festival” and “Special Gift.” These promotions appear to have enabled Bithumb to ramp up its daily volume — and the prominence of KRW trading in the spot crypto market — even as its number of active traders decreased significantly, according to web analytics.

From the report:

“Bithumb saw a 284% increase in volumes from the previous average of 323 million USD for the Sept/Oct period. This increase in volumes follows after Singapore-based BK Global Consortium bought a controlling share in the exchange in recent months, and later implemented a series of airdrop competitions, raffles, rebates, and other programs designed to incentivize non-Korean users to sign up to the exchange and trade in exchange for rewards. They have also implemented a potential form of trans-fee mining for certain users, where trading beyond a specific volume is rewarded in the form of “Bithumb Cash” at a later date.”

As CCN.com has noted in the past, higher trading volumes tend to correlate with a strong bitcoin price, while lower volumes tend to accompany gradual downward movements. Consequently, the fact that Bithumb, along with several other lesser-known exchanges, managed to increase daily turnover even as their active user bases shrunk might indicate that these trading promotions helped the bitcoin price remain stable above $6,000 for longer than fundamental and technical factors suggest that it should have.

To wit, bitcoin’s first break below $6,000 occurred shortly after one of Bithumb’s trading promotions ended, at which point the market embarked on a severe downward trajectory from which it has thus far been unable to recover.

Commenting on the report, Mati Greenspan, senior market analyst at eToro, said that while Bithumb should probably not be blamed for the recent bitcoin price collapse, the crypto exchange’s trading promotion may have helped the market remain stable for longer than it would have otherwise.

“If these findings are indeed accurate, I would say that blaming South Korea for the drop wouldn’t exactly be correct,” Greenspan wrote in daily market commentary shared with CCN.com. “More likely, it appears that the volume promotion by Bithumb caused several months of stabilization in prices, to begin with.”

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