According to data from CoinMarketCap, the trading volume of the cryptocurrency market reached its highest peak of the year in February 2025, but has been on a steady decline since then. As of March 12, the global average daily trading volume has shrunk by 52%, from $472.5 billion in early February to the current $163 billion. While CoinMarketCap’s data differs slightly from CoinGecko, the trends are consistent, indicating a decline in market liquidity.
Blockchain analytics firm Santiment stated in a post on X on March 13 that when the trading volume of major cryptocurrencies continues to decrease, even if market prices occasionally rebound, it often indicates a waning enthusiasm among investors for the market.
Santiment further explained:
“When trading activity for major cryptocurrencies remains sluggish, even if prices see a brief rebound, it often signals an overall weakening of the market.”
According to data from CoinGecko, since February, the total market capitalization of the cryptocurrency market has shrunk by nearly 25%, dropping from $3.7 trillion to $2.8 trillion on March 12. Notably, over the past 10 days, the cryptocurrency market cap has evaporated by 15%, primarily due to the potential tightening of monetary policy by the U.S. Federal Reserve and escalating global trade tensions.
Santiment pointed out that the decline in market trading activity reflects a growing pessimism among traders. They added:
“When prices experience a slight rebound, if trading volume does not increase correspondingly, it usually indicates a lack of market confidence, and investors are skeptical about the potential for price increases at the current levels.”
Although a decrease in market trading volume does not necessarily represent a clear bear market signal, Santiment emphasized that the decline in volume indicates reduced participation from both institutional and retail investors. Typically, trading volume begins to rise before a market recovery; therefore, when prices rebound without a noticeable increase in trading volume, it may suggest that the market rebound will not last and could even lead to further declines.
On the other hand, as of now, the total market capitalization of the cryptocurrency market is approximately $2.02 trillion, significantly down from $2.4 trillion in early February. The Fear and Greed Index also indicates that market sentiment remains in a cautious “fear” state, reflecting the wait-and-see attitude of market participants.
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