Trading activity in bitcoin futures listed on the Chicago Mercantile Exchange (CME) has cooled notably as the leading cryptocurrency languishes in the price doldrums.

Daily trading volume fell to $87 million (via 1,895 contracts) on Friday to hit the lowest level since April 17, when the exchange-traded contracts were worth $77 million, according to data from crypto derivatives research firm Skew. 

Volume topped out at $914 million on May 11 – the day bitcoin underwent its third miner reward halving – and has been on a declining trend ever since.

The halving was widely expected to put a strong bid under the cryptocurrency. Instead, bitcoin’s uptrend from March lows below $4,000 stalled following the halving, and the cryptocurrency has remained largely locked in the range of $9,000 to $10,000 ever since.

The unusually quiet period for bitcoin trading seems to be the primary reason behind the steady decline in CME's futures volume. 

Global daily volume, as calculated by adding numbers from BitMEX, Deribit, Kraken, OKEx, bitFlyer, CoinFlex, CME. Huobi, FTX, Bitfinex, Binance, Bybit, and Bakkt, has also tanked over the past two months.  

As of Sunday, aggregate daily volume was just $4.65 billion, down 87% from the $36 billion observed on May 11. 

“Continued range trading and an inability to confidently break above $10,000 has led investors to allocate capital into other segments of the crypto market,” said Matthew Dibb, co-founder of Stack, a provider of cryptocurrency trackers and index funds. 

Also read: DeFi Driving Chainlink’s Link Token to Record Highs

Indeed, alternative cryptocurrencies like the oracle network Chainlink’s LINK token, Stellar's XLM and tokens associated with the decentralized finance (DeFi) space like Compound's LEND have received greater attention from the investor community over the past week or two. 

Tokens like LINK and XLM have witnessed a surge in trading volumes in the spot market this month, while bitcoin’s volume in both the spot market and futures market has declined. 

LINK’s trading volume on Coinbase, the largest U.S. exchange, has increased by 67%, while XLM’s volume has jumped by nearly 40% to new record highs. Meanwhile, bitcoin trading has diminished for the third straight month. 

“With the hype around the DeFi, this trend may continue for the short-term,” Dibb said in a direct chat with CoinDesk. 

Open interest, or open positions in futures, listed on the CME (which is considered synonymous with institutional participation) has also declined along with the daily trading volume. As of Friday, $364 million worth of positions were open on the CME – down 31% from the high of $532 million observed on May 19. 

However, aggregate or global open interest remains elevated near $4 billion, the highest level since early March. 

Derivative analysts consider the combination of declining trading volume and elevated open interest as a sign of investors holding on to their positions. In such cases, markets usually extend the preceding move, meaning bitcoin could break above $10,000 in the near-term, marking a continuation of the uptrend from the March low of $3,867. 

Disclosure: The author holds no cryptocurrency at the time of writing.