Crypto Trading Volume Declines, Signaling Market Exhaustion

Crypto trading volume has been declining since the market peaked in February. According to data from CoinGecko, the daily trading volume reached its highest level of the year in early February when it hit $440 billion. Since then, it has fallen by 63% to $163 billion on March 12. The market data company CoinMarketCap has slightly lower figures, but they show the same trend, with the volume peaking in early March 2025 before dropping by 52% to the current level.

Analysts from the analytics firm Santiment stated on X on the 13th that this decline in volume suggests that traders’ enthusiasm for the asset class is waning.

– When trading volume for major cryptocurrencies consistently declines, even during mild price recoveries, it usually indicates a decrease in trader enthusiasm – wrote Santiment.

Santiment added that trader behavior indicates a mix of ‘exhaustion, hopelessness, and capitulation’ following a further decline in market capitalization over the past two weeks. The total market capitalization has fallen by nearly 25% since early February, decreasing by $900 billion as the crypto market correction deepens.

These declines accelerated over the past 10 days as the market lost 15% amid rising fears of a recession in the U.S. due to escalating global trade tensions. Santiment noted that traders are becoming cautious, suggesting they may 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 results – the analysts added.

The weakening of trading volume amid minor price jumps can serve as an early warning sign of weakening market momentum, Santiment reported, adding that without strong buying participation, price increases can quickly lose strength, as there simply isn’t enough underlying support to sustain an upward trend.

– This leads to the possibility that any recovery could be temporary, with prices sensitive to a new decline – it was added.

However, the reduction in volume during minor price jumps is not necessarily a direct bearish signal, it was noted, adding that volume is a metric that measures the participation of retail and institutional traders and must begin to rise before prices do.

– To signal a healthier and more sustainable recovery, bulls will generally want to see both rising prices and rising volume simultaneously – Santiment emphasizes.

The current market capitalization of the crypto market is around $2.8 trillion, the same level it was at this time last year before seven months of consolidation followed. Meanwhile, the Crypto Fear & Greed Index remains in the fear territory, below 50, where it has been since February 21.