Cryptocurrency prices continue to fluctuate as they make their way down a two-month correction period fueled by a string of negative stories. Analysts said prices are expected to slump further this summer as investor interest in digital assets wanes.

Trading volumes for digital currencies at major exchanges have declined. Exchanges such as Coinbase, Kraken, Binance, and Bitstamp had fallen by an average of about 40% last month. According to cryptocurrency market data research company CryptoCompare, lower prices and volatility remain to be the main reasons for the decrease in trading volumes.

Last month, the price of Bitcoin - the world's largest cryptocurrency - fell to a monthly low of $28,908 per coin. The digital currency ended the month down 6%. CryptoCompare said the daily trading volume of the digital asset fell by 42.3% June 22 from an intramonth high in May. As of Tuesday, Bitcoin is trading at around $32,944 per coin. 

A report from Reuters pointed to China as a major catalyst in the recent fall of cryptocurrency prices. The report said China's latest efforts to crack down on the mining and trading of cryptocurrencies had greatly affected investor sentiment.

"The Chinese crackdown has caused a lot of fear, which is showing up in markets. The digital asset ecosystem got punched in the face, so it's currently up against the ropes versus fighting in the middle of the ring. Typically, when you have large sell-offs, participants are quite fearful and pull back their chips," analysts at Pervalle Global said.

Last month, China issued a ban on cryptocurrency activities as it prepared to launch its own state-backed digital currency. The order shut down cryptocurrency mining operations in various Chinese provinces, which accounted for more than 50% of the world's total Bitcoin mining power.

Analysts at VanEck said as miners packed their bags to leave China, most of them weren't conducting transactions with the cryptocurrencies they had mined.

Apart from China's crackdown, several financial institutions have expressed concerns over the negative effects of cryptocurrencies on existing financial systems.

The Financial Action Task Force - an intergovernmental organization formed by the Group of Seven - had recently moved to regulate cryptocurrency trading in an attempt to mitigate illegal activities such as money laundering.

"Once these stories began to permeate through the market in May, sentiment dropped to single-digit levels on a scale of 1 to 150. Eventually, this resulted in the trading volume for bitcoin dropping by nearly half since its peak, and it's further down 32% from its June average," analysts at cryptocurrency analytics company Trade The Chain said.