Bitcoin and Ethereum Waver–Why Did Trading Volume Drop?

Bitcoin (BTC) and Ethereum (ETH) have recently entered a phase of pronounced consolidation, characterized by a notable decrease in volatility and, more significantly, a sustained decline in trading volume across both spot and derivatives markets. BTC is currently struggling to maintain momentum above critical resistance levels, while ETH’s price action has moderated following the preliminary approval news of U.S. spot ETFs.

This dip in trading volume stems primarily from persistent macroeconomic uncertainty. Traders, both institutional and retail, are reluctant to commit large capital reserves until there is greater clarity regarding the trajectory of global interest rates, particularly from the U.S. Federal Reserve. Delayed expectations for rate cuts have suppressed the overall appetite for risk assets, leading many large players to adopt a “wait-and-see” approach, thus shrinking daily liquidity.

Secondly, the market is experiencing seasonal fatigue. The major catalysts of early 2024—the Bitcoin Halving and the launch of U.S. Spot Bitcoin ETFs—have been fully priced in, and the market lacks a fresh, high-impact narrative to generate new trading excitement. Historically, crypto markets often experience a slowdown during the summer months (the ‘summer doldrums’), contributing to lower retail participation and thinner order books.

Finally, the technical setup encourages a holding pattern. Low volume signifies that selling pressure is not aggressively dominating the market, yet buyers are also unwilling to chase prices higher without definitive confirmation of a breakout. The market is now highly sensitive to external shocks; however, without an immediate geopolitical or regulatory catalyst, the volume drop reflects a state of equilibrium where investors are largely sitting on their hands, awaiting a clear directional signal.

Source: Bitcoin and Ethereum Waver–Why Did Trading Volume Drop?