Sharp decline in crypto trading volume: Is the market signaling exhaustion?

Cryptocurrency market trading volumes have shown a significant decline since reaching peak levels in February. According to data from the blockchain analysis platform Santiment, the total trading volume of the crypto market peaked at $440 billion in early February and dropped to $163 billion by March 12, marking a 63% decrease. This trend indicates that investors are exhibiting fatigue and reluctance towards market volatility.

The total market capitalization has also fallen by over 25% since early February. The decline accelerated from the beginning of March, reflecting increased uncertainty and insecurity in the markets amid recession fears in the U.S. Santiment noted that the ongoing decrease in trading volumes could signal weakness in market momentum and deterioration in investor sentiment. Global uncertainties have played a significant role in this downturn, as highlighted by recent developments impacting risk assets, including cryptocurrencies.