According to a CoinGlass report, Binance sees a substantial drop in trading volume, which is currently tied to trading bots that are used for stabilizing the market and liquidity. As for now, major assets are losing from 70% up to 95% of their volume, but it is not yet clear what the reason is behind the drop.
The report goes further to indicate that Binance currently experiences huge declines in trading volumes related to inter-trading bots that are used for market stabilization and providing the necessary liquidity. At the moment, the main assets are losing from 70% up to 95% of their volume, yet it is unclear why this volume dropped.
The drop is huge, amount-wise. On some, it is steep. For example, Pepe was down by over 97.5%, Bitcoin was down by 62% and Solana plunged by 88.9%. Obviously, it might create some issues with liquidity, if CoinGlass’s report is correct.
What happened to #Binance?
Have all the robots gone on strike?@binance @_RichardTeng pic.twitter.com/2bSfiGxBbn
— CoinGlass (@coinglass_com) May 28, 2024
One of the potential reasons for this to unexpectedly happen is a failure of the trading bots that keep the market’s liquidity balanced. They are widely used by traders with a number of functions: arbitrage, market-making and provision of liquidity.
If some critical bot goes offline, it removes a substantial part of trading activity in a tick, causing a sudden fall in transaction volume. Such bots are used nearly on nearly every centralized exchange and are an integral part of a smooth user experience in trading.
There can be many reasons for bots going offline — it may be a technical glitch, update or maintenance work going on at the platform; changes in the policy or restrictions of APIs by Binance may be another reason. Therefore, in this sense, the bots are going to be stopped sometimes as a consequence of changing policies or restrictions being imposed by Binance over APIs.