Cryptocurrency trading volume drops 70% to $15B: Is the market losing steam?

After a 1.23% hike over the previous day, the global cryptocurrency market capitalization was trading at $2.18 trillion at press time. Despite the notable increase, The Kobeissi Letter reports that cryptocurrency trading activity is declining.

According to the data, daily Spot trading volume across 44 exchanges has dropped to about $15 billion. This marks a 70% drop from the January peak and the lowest amount of the year, 2026. 

Exceptionally, the market only saw two days in early February when cryptocurrency trading volumes had topped $100 billion. 

What does this mean for the broader market?

This implies that a much smaller number of investors are actively purchasing and disposing of cryptocurrencies. Several participants seem to be waiting for a catalyst, like the approval of the CLARITY Act, or a shift in monetary policy before investing new money. 

The story doesn’t end there, though, because a decline in cryptocurrency trading volume causes a decline in liquidity.  This, in turn, affects the strength of price movements.

Simply put, price movements with low volume indicate low participation, which leaves rallies or declines more susceptible to abrupt reversals because of the lack of liquidity.

However, less activity doesn’t always indicate that institutions are selling. In fact, it could just mean that they are being cautious and waiting for better market conditions.

Cryptocurrency trading activity also flags concerns

But The Kobeissi Letter also shed light on the concentration of cryptocurrency trading activity, as over 60% of Spot trading volume is concentrated on the six biggest exchanges.

As a result, liquidity is increasingly concentrated on a few platforms, and smaller exchanges are subject to higher trading costs and thinner order books.

For its part, Bitget on the 3rd of August declared  that it would progressively discontinue its cryptocurrency trading services for citizens of Japan.

Market liquidity echoes similar sentiment

This further coincided with 64,537 traders being liquidated in the last day, bringing the total amount of liquidations to $246.82 million according to CoinGlass data. 

Additionally, there were significant losses suffered by some leveraged traders during the market move. This was highlighted by the fact that the largest single liquidation was an ETHUSDT position worth $24.37 million on Aster.

In fact, Spot decentralized exchange (DEX) trading volume has also fallen to one of its lowest levels in almost two years, according to a recent report by AMBCrypto.

Final Summary

• Daily Spot trading volume on the 44 exchanges has dropped to about $15 billion, about 70% less than the peak in January.
• The current crypto market is giving signs of crypto market liquidity drying up with exchanges shutting down.