Daily Crypto Analysis: South Korean Exchange Volume Plummets 60% in December

• Upbit trading volume fell 60.6% to $25.91 billion from December 1-22 compared to November
• Bithumb volume dropped 60.4% to $12.45 billion over the same period
• Global crypto sentiment registers "Extreme Fear" with score of 24/100
• Bitcoin trading at $88,241, down 0.29% in 24 hours amid broader market weakness

NEW YORK, December 23, 2025 — South Korea's leading cryptocurrency exchanges Upbit and Bithumb have experienced a dramatic 60% decline in trading volume during December, according to data from Bizwatch. This daily crypto analysis reveals that from December 1 to 22, total trading volume on both platforms collapsed to yearly lows, with Upbit processing $25.91 billion (down 60.6% from November's $65.86 billion) and Bithumb handling $12.45 billion (down 60.4% from $31.49 billion). Market structure suggests this represents more than seasonal weakness, potentially indicating deeper structural issues in the Korean crypto ecosystem.

Market Context & Background

South Korea has historically represented one of the most active retail cryptocurrency markets globally, with trading volumes frequently exceeding those of traditional financial hubs. The current collapse mirrors patterns observed during the 2022 bear market, when Korean exchange volumes declined by similar percentages over consecutive months. However, the timing raises questions: December typically sees increased trading activity due to tax-loss harvesting and year-end portfolio rebalancing. The magnitude of this decline contradicts the official narrative of "sluggish market" conditions, suggesting either capital flight or regulatory pressure is creating a liquidity vacuum. According to on-chain data, Korean exchange outflows have accelerated since November, coinciding with increased scrutiny from the Financial Services Commission regarding anti-money laundering compliance.

Related developments in the Korean market include Kakao's KRW stablecoin ecosystem targeting institutional adoption, which may be drawing liquidity away from traditional spot exchanges. Additionally, the broader market context shows the Altcoin Season Index has dropped to 16 amid extreme fear, indicating risk-off sentiment across all crypto assets.

What Happened?

Between December 1 and December 22, 2025, trading volume on Upbit collapsed from $65.86 billion in November to $25.91 billion, representing a 60.6% decrease. Bithumb experienced nearly identical deterioration, with volume falling from $31.49 billion to $12.45 billion (60.4% decline). These figures represent the lowest monthly volumes recorded in 2025 for both exchanges. The data, originally reported by Bizwatch and confirmed through multiple trading analytics platforms, shows consistent declines across all major trading pairs, with Korean won (KRW) pairs experiencing the most severe liquidity evaporation. Market analysts attribute the decline to multiple factors: reduced retail participation, institutional capital rotating to offshore venues, and regulatory uncertainty surrounding the implementation of the Travel Rule in South Korea.

Technical Analysis & Price Action

Bitcoin's current price of $88,241 represents a critical juncture in market structure. The daily chart shows a clear Fair Value Gap (FVG) between $85,000 and $90,000 that formed during the November rally. This FVG now acts as a magnet for price action, with the current consolidation suggesting either a liquidity grab above $90,000 or a breakdown toward the $82,000 Fibonacci support level. The 50-day moving average at $86,500 provides immediate support, while resistance clusters around the psychological $90,000 level. RSI readings at 42 indicate neutral momentum with bearish bias, while volume profile analysis shows declining participation across all timeframes.

Bullish Invalidation Level: A sustained break below $82,000 (the 0.618 Fibonacci retracement of the October-November rally) would invalidate any near-term bullish structure and target $78,000.

Bearish Invalidation Level: A reclaim of $92,000 with accompanying volume would negate the current downtrend structure and target the yearly high at $95,000.

By The Numbers

Why It Matters

For institutional investors, the Korean volume collapse represents a warning signal about regional market health. South Korea has historically served as a leading indicator for Asian retail sentiment, and such dramatic declines typically precede broader market corrections. The simultaneous drop across both major exchanges suggests systemic rather than platform-specific issues, potentially related to regulatory changes or capital controls. Retail traders face increased slippage and reduced liquidity, making large orders more expensive to execute. This liquidity vacuum could create Gamma Squeeze conditions in options markets if volatility spikes unexpectedly.

From a five-year perspective, this event highlights the fragility of exchange-dependent liquidity models. As decentralized finance protocols continue maturing with innovations like EIP-4844 proto-danksharding, centralized exchanges may face permanent structural declines in trading volume. The Korean case study provides early evidence of this transition.

Community Sentiment

Industry observers on X/Twitter express concern about the data's implications. One quantitative analyst noted, "The 60% drop isn't just seasonal—it's a liquidity crisis. When two dominant exchanges lose volume simultaneously, it suggests capital is leaving the jurisdiction entirely." Market bulls counter that the decline represents healthy consolidation after November's rally, with one trader stating, "Low volume at support is bullish. It shows weak hands have been shaken out." However, the prevailing sentiment remains skeptical, with multiple analysts questioning whether Korean regulators are quietly implementing stricter capital controls ahead of anticipated global regulatory frameworks.

Price Prediction / Future Outlook

Bullish Case: If Bitcoin holds above the $85,000 support level and Korean exchanges see volume recovery in early January, the current decline could represent a healthy correction within an ongoing bull market. Institutional inflows from approved spot ETFs could offset retail outflows, pushing Bitcoin toward $100,000 by Q2 2026. The volume collapse would then be viewed as a temporary liquidity vacuum rather than structural decline.

Bearish Case: If the volume decline persists into January and spreads to other Asian exchanges, it could signal broader capital flight from crypto assets. Bitcoin breaking below $82,000 would target the $75,000 region, with altcoins experiencing disproportionate declines. Korean exchanges might face further volume erosion as traders migrate to decentralized alternatives or offshore venues with better liquidity conditions.

FAQs

Why did Upbit and Bithumb volume drop 60% in December? Multiple factors contributed: reduced retail participation amid "Extreme Fear" sentiment, institutional capital rotating to offshore exchanges, regulatory uncertainty, and potential pre-holiday risk reduction.

Is this volume decline specific to South Korea or a global trend? While global volumes have declined moderately, the 60% drop appears disproportionately severe in South Korea, suggesting regional-specific factors are at play.

How does this affect Bitcoin's price? Reduced exchange liquidity increases volatility risk and slippage for large orders, potentially exacerbating price movements during periods of high demand or selling pressure.

Will volume recover in January? Historical patterns show January typically sees increased trading activity, but the magnitude of December's decline suggests recovery may be slower than usual.

What are the implications for other crypto exchanges? If regulatory pressure is the primary driver, exchanges in similar jurisdictions may experience comparable volume declines. Decentralized exchanges could benefit from capital migration.

Source Note: Market data and factual reporting in this article are sourced from original reports. Commentary and analysis provided by CoinMarketBuzz.