Crypto market historically faces seasonal downtrend in August: Coinbase

August is usually marked by reduced cryptocurrency market activity and a slump in the value of major tokens, Coinbase analysts said.

"Seasonality hasn’t typically worked in crypto’s favor for the month of August," Coinbase analysts David Duong and David Han said.

In Friday's Coinbase Weekly report, the analysts added that August has historically seen lower market activity. For example, bitcoin spot volumes dropped 19% in August 2023 compared to June of the same year. They said that bitcoin futures volumes were also down 30% over the same period across global centralized exchanges.

"Bitcoin averages a decline of 2.8% during this month over the last five years and lower liquidity and trading volumes can lead to increased volatility during August," they added. The Coinbase analysts said that we may see the same lackluster behavior this year.

August could see a month of lacklustre behavior

Speaking to The Block, Bitfinex Head of Derivatives Jag Kooner also said that August could see a lack of liquidity in many assets and the seasonality of August could be one reason for it.

"We are currently seeing significant buy walls being built at range lows on several altcoins and we also expect the bitcoin price to range between $61,000 to $70,000, which will provide an accumulation zone," Kooner added.

Bitcoin traded around $65,189 at publication time, up 1.2% over the past day, according to The Block's Bitcoin Price Page.