On March 13th, COINOTAG reported insights from Santiment regarding the current state of crypto trading dynamics. Following a peak in trading volume on February 27th, the overall activity in the cryptocurrency market has consistently diminished. This decline stems from traders who, initially optimistic during the dip, are now exhibiting signs of exhaustion and despair. As trading volumes for major cryptocurrencies continue to fall—particularly during minor price rallies—it suggests a notable decrease in trader enthusiasm.
This trend indicates that market participants are exercising greater caution, which implies skepticism regarding the sustainability of any recent upward movements. Furthermore, a reduction in trading volume amid these slight rebounds might signal a possible waning momentum within the market. Without robust buying support, temporary rallies may falter, potentially leading to further price declines.
While diminished trading volume during minor price changes does not inherently indicate a bearish market, it illustrates a hesitance among both retail and institutional investors. The market may experience limited volatility if traders anticipate confirmation from each other before committing to further growth. For a well-rounded recovery, both price and volume must show synchronized increases. Until trading activity rebounces significantly, prevailing market sentiment is likely to remain cautious.