Crypto trading volume drops 63%

Cryptocurrency trading volume has plummeted by 63% since its peak in February 2025, dropping from $440 billion to $163 billion as of March 12, according to CoinGecko data.

This sharp decline reflects signs of trader exhaustion and weakening market momentum, analysts suggest.

Market research firm Santiment noted that the decrease in trading activity indicates diminishing enthusiasm among traders.

"When trading volume for major cryptocurrencies consistently drops, even during slight price recoveries, it typically points toward diminishing trader enthusiasm," the firm stated.

Santiment added that current market behavior reflects "a mix of exhaustion, hopelessness, and capitulation."

The broader crypto market has also faced significant losses.

Total market capitalisation has fallen by nearly 25% since February, shrinking by $900 billion.

Over the past 10 days alone, markets have declined by 15%, driven by fears of a U.S. recession and escalating global trade tensions.

Santiment analysts warned that declining trading volumes amid minor price bounces could be an early indicator of weakening market momentum.

"Without robust buying participation, price gains can quickly lose steam," they explained.

This raises concerns that any short-term rebounds in cryptocurrency prices might lack the underlying support needed to sustain an upward trend.

However, analysts also cautioned against interpreting reduced trading volumes as an outright bearish signal.

Trading volume measures participation from both retail and institutional traders and often needs to rise before prices can stabilise or recover.

"To signal a healthier and more sustainable recovery, bulls generally will want to see both rising prices and rising volumes simultaneously," Santiment reported.

The crypto market’s total capitalisation currently stands at approximately $2.8 trillion, mirroring levels seen this time last year before a prolonged consolidation period.

Meanwhile, the Crypto Fear Greed Index remains in "fear" territory, where it has been since February 21.