On March 13, Santiment posted on the X platform that “Since February 27 Since the daily trading volume peaked, the overall crypto market volume has continued to decline (when traders optimistically bought the dip). After further declines in the past two weeks, trader behavior shows exhaustion, desperation, and capitulation. When the trading volume of major cryptocurrencies continues to decline, even during a small price recovery, it usually means that trader enthusiasm is weakening. In this case, traders are becoming more cautious, indicating that they may not believe that the current upward trend can be sustained.
In addition, shrinking trading volume during a minor rebound can be an early sign of weakening market momentum. Without strong buying support, price increases can quickly lose momentum because there is not enough capital inflow to maintain the upward trend. This may mean that any rebound is only temporary and prices are still at risk of falling again.
Shrinking trading volume during a small rebound does not necessarily constitute an immediate bearish signal, but trading volume reflects the market participation of retail and institutional traders. If both are waiting for the other to drive market value growth to make the next move, the market may be stagnant, showing a low volatility or even slightly downward trend. For a healthier and more sustainable market recovery, bulls usually want to see price and trading volume grow in tandem. Until trading activity picks up significantly, market sentiment is likely to remain cautious. “
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