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CoinTelegraph 2025-03-13 02:26:58

Crypto trading volume slumps, signaling market exhaustion: Analysis

Crypto trading volumes and dwindling digital asset prices are flashing signs of trader exhaustion and potentially weaker market momentum, according to analysts. Crypto-wide trading volume has been dropping since it peaked in February amid dip-buying opportunities. According to CoinGecko data , daily trading volume hit its highest level this year in early February when it reached $440 billion. It has since sunk by 63% to $163 billion on March 12. Market data firm CoinMarketCap has slightly lower figures but they show the same trend — that volume peaked in 2025 in early March before falling back 52% to current levels. Analytics firm Santiment said on X on March 13 that this decline in volume suggests that trader enthusiasm for the asset class is diminishing. “When trading volume for major cryptocurrencies consistently drops, even during slight price recoveries, it typically points toward diminishing trader enthusiasm.” Santiment added that trader behavior “indicates a mix of exhaustion, hopelessness, and capitulation” following further market capitalization declines over the past fortnight. Declining crypto trading volume. Source: Santiment Total market capitalization has declined almost 25% since the beginning of February, shrinking by $900 billion as the crypto market correction deepens. Those declines have accelerated over the past 10 days when markets have lost 15% as fears of a recession in the United States increased amid escalating global trade tensions . Santiment stated that traders are becoming cautious, suggesting they might not believe that the current upward price movements will last. “Essentially, reduced trading activity reflects uncertainty, as fewer traders are convinced that buying at current levels will yield profitable outcomes,” the analysts added. Weakening trading volume amid minor price bounces can serve as an “early warning sign of weakening market momentum,” Santiment reported, adding that without robust buying participation, price gains can quickly lose steam, “as there simply isn’t enough underlying support to sustain the upward trend.” “This leads to the possibility that any rebound could be temporary, with prices vulnerable to another downturn.” Related: Bitcoin high-entry buyers are driving sell pressure, price may ‘floor’ at $70K However, shrinking volume during minor rebounds isn’t necessarily a direct bearish signal, it said, adding that volume is a metric that measures participation from both retail and institutional traders and it needs to start rising before prices do. “To signal a healthier and more sustainable recovery, bulls generally will want to see both rising prices and rising volumes simultaneously.” Crypto market capitalization is currently around $2.8 trillion, which is where it was this time last year before seven months of consolidation followed. Meanwhile, the Crypto Fear & Greed Index remains in “fear” territory, below 50, where it has been since Feb. 21. Magazine: Mystery celeb memecoin scam factory, HK firm dumps Bitcoin: Asia Express

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