Bitcoin has seen a decline in trading volume in both the spot and futures markets over the past five days. The decline follows a sharp drop in Bitcoin prices a week after extreme volatility, which could be driven by a combination of disappointing political developments, macroeconomic tensions and weekend trading patterns.
CheckonChain’s data shows a complete contrast in the magnitude of the volume decline between the spot market and the futures market. Spot trading volume, which represents the direct buying and selling of Bitcoin on centralized exchanges, fell by more than 26%, down from $12.07 billion on March 6 to $8.93 billion on March 10.
In contrast, futures trading volume fell from $1100.95 billion to $103.48 billion. This was a 6.73% decrease. The decline in the spot market surpassed the derivatives market by 19.28 percentage points, indicating sensitivity to the market situation.
This disparity indicates the structural difference between the two markets. Spot trading is usually driven by retail investors seeking direct exposure. Therefore, the spot market responds quickly and aggressively to changes in emotions.
Meanwhile, futures trading, which includes leveraged positions and hedges, tends to remain active even in uncertainty, as traders adjust their positions to infer price movements regardless of direction. Between March 6 and March 10, the derivatives market showed more resilience, but the spot volume was bear the brunt of the recession.
The March 8 weekend was crucial in driving a decline in overall volume, with both markets falling significantly. Unlike traditional financial markets, the crypto market is operating continuously, but on weekends it consistently exhibits low trading activity due to multiple factors. Institutional traders who account for increasing crypto volumes often shrink their operations outside normal business hours, especially on weekends when traditional markets are closed.
One of the biggest derivative exchanges, CME operates during normal business hours. This means most of the amount of futures you make during weekday drops. Retailers also tend to reduce their activity due to their personal schedules and perceptions that major market-run events are unlikely to occur.
Furthermore, there are no overlapping trading sessions in the equity and forex markets, limiting arbitrage opportunities and further reducing attenuation. This natural weekend slowdown creates a baseline that reduces liquidity, making the market more susceptible to external shocks.
In this case, the normal weekend lull was amplified by certain events. On March 8, President Trump announced his planned strategic Bitcoin spare plan. Many investors were anticipating bold moves to show institutional adoption and price hikes, including the US government’s large-scale Bitcoin purchases.
Instead, the plan used seized Bitcoin and a “budget-neutral” acquisition strategy to provide no new demand. Many Bitcoin supporters celebrated the plan, but some markets seemed disappointed.
This disappointment sparked a careful response, with traders taking a waiting approach rather than actively involved. At the same time, escalating trade tensions between the US and China, pressure was added. New tariffs on Chinese goods have heightened the fear of economic fallout and promoted risk-off sentiment that has spilled over the crypto market.
The market response was quick and clearly visible with price action. On March 9, Bitcoin prices fell from $86,170 to $80,640, down 6.4% in 24 hours. This volatility could have further blocked the transaction as participants heheed amid uncertainty.
Interestingly, the amount of derivatives rose temporarily on March 8, rising from $1100.78 billion on March 7 to $11.568 billion, suggesting that some traders used futures to hedge or capitalize the expected decline. However, by March 9th, derivative volumes had fallen to $1066.6 billion, in line with a wider trend in decline in activity.
Total sales also fell 26.72%, down from $61 billion on March 6th to $4.47 billion on March 10th. This indicates that the price decline was not driven by aggressive sales, but rather by lack of interest on purchases. When traders retreated, there was no demand, allowing prices to slide even when the selling pressure was relatively low.
As seen in Trump’s announcement and the rapid response to trade tensions, crypto market sensitivity remains prominent. This shows how different it is from traditional markets where responses are often measured more.
The sudden drop in spot volume also revealed the risk of liquidity. As trading activity faded, price movements were exaggerated – evident in the 6.4% outbreak on March 9th – poses the challenge of market stability. On the other hand, the low amount of derivatives suggests that traders are relying on the future to navigate uncertainty, reflecting an increasing sophistication in risk management.
Post futures are stable, but a fall in spot Bitcoin trading volume first appeared in encryption.
