Crypto trading volumes and dwindling digital asset prices are flashing signs of trader exhaustion and potentially weaker market momentum, according to analysts. 

Crypto-wide trading volume has been dropping since it peaked in February amid dip-buying opportunities. According to CoinGecko data, daily trading volume hit its highest level this year in early February when it reached $440 billion. It has since sunk by 63% to $163 billion on March 12. 

Market data firm CoinMarketCap has slightly lower figures but they show the same trend — that volume peaked in 2025 in early March before falling back 52% to current levels.  

Analytics firm Santiment said on X on March 13 that this decline in volume suggests that trader enthusiasm for the asset class is diminishing.

“When trading volume for major cryptocurrencies consistently drops, even during slight price recoveries, it typically points toward diminishing trader enthusiasm.”

Santiment added that trader behavior “indicates a mix of exhaustion, hopelessness, and capitulation” following further market capitalization declines over the past fortnight. 

Declining crypto trading volume. Source: Santiment

Total market capitalization has declined almost 25% since the beginning of February, shrinking by $900 billion as the crypto market correction deepens. 

Those declines have accelerated over the past 10 days when markets have lost 15% as fears of a recession in the United States increased amid escalating global trade tensions.

Santiment stated that traders are becoming cautious, suggesting they might not believe that the current upward price movements will last. “Essentially, reduced trading activity reflects uncertainty, as fewer traders are convinced that buying at current levels will yield profitable outcomes,” the analysts added.

Weakening trading volume amid minor price bounces can serve as an “early warning sign of weakening market momentum,” Santiment reported, adding that without robust buying participation, price gains can quickly lose steam, “as there simply isn’t enough underlying support to sustain the upward trend.”

“This leads to the possibility that any rebound could be temporary, with prices vulnerable to another downturn.”

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However, shrinking volume during minor rebounds isn’t necessarily a direct bearish signal, it said, adding that volume is a metric that measures participation from both retail and institutional traders and it needs to start rising before prices do.

 “To signal a healthier and more sustainable recovery, bulls generally will want to see both rising prices and rising volumes simultaneously.”

Crypto market capitalization is currently around $2.8 trillion, which is where it was this time last year before seven months of consolidation followed. 

Meanwhile, the Crypto Fear & Greed Index remains in “fear” territory, below 50, where it has been since Feb. 21. 

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A crypto trader fell victim to a sandwich attack while making a $220,764 stablecoin transfer on March 12 — losing almost 98% of its value to a Maximum Extractable Value (MEV) bot.

$220,764 worth of the USD Coin (USDC) stablecoin was swapped to $5,271 of Tether (USDT) in eight seconds as the MEV bot successfully front-ran the transaction, banking over $215,500.

Data from Ethereum block explorer shows the MEV attack occurred on decentralized exchange Uniswap v3’s USDC-USDT liquidity pool, where $19.8 million worth of value is locked.

Details of the sandwich attack transaction. Source: Etherscan

The MEV bot front-ran the transaction by swapping all the USDC liquidity out of the Uniswap v3 USDC-USDT pool and then put it back in after the transaction was executed, according to founder of The DeFi Report Michael Nadeau.

The attacker tipped Ethereum block builder “bob-the-builder.eth” $200,000 from the $220,764 swap and profited $8,000 themselves, Nadeau said.

DeFi researcher “DeFiac” speculates the same trader using different wallets has fallen victim to a total of six sandwich attacks, citing “internal tools.” They pointed out that all funds traveled from borrowing and lending protocol Aave before being deposited on Uniswap.

Two of the wallets fell victim to an MEV bot sandwich attack on March 12 at around 9:00 am UTC. Ethereum wallet addresses “0xDDe…42a6D” and “0x999…1D215” were sandwich attacked for $138,838 and $128,003 in transactions that occurred three to four minutes earlier.

Both transactors made the same swap in the Uniswap v3 liquidity pool as the trader who made the $220,762 transfer. 

Others speculate the trades could be attempts at money laundering.

“If you have NK illicit funds you could construct a very mev-able tx, then privately send it to a mev bot and have them arb it in a bundle,” said founder of crypto data dashboard DefiLlama, 0xngmi.

“That way you wash all the money with close to 0 losses.”

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While initially criticizing Uniswap, Nadeau later acknowledged that the transactions didn’t come from Uniswap’s front end, which has MEV protection and default slippage settings.

Nadeau backtracked on those criticisms after Uniswap CEO Hayden Adams and others clarified the protections Uniswap has in place to fight against sandwich attacks.

Source: Hayden Adams

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New US regulatory guidance allowing banks to become validators for blockchain networks is a major step for institutional adoption but worsens centralization risks, Bohdan Opryshko, chief operating officer of staking service provider Everstake, told Cointelegraph. 

On March 7, the US Office of the Comptroller of the Currency (OCC) eased its stance on how banks can engage with crypto, including permitting banks to participate “in independent node verification networks,” the regulator said. 

Opryshko said US banks’ increased involvement in proof-of-stake (PoS) networks, such as Ethereum and Solana, could be a “double-edged sword.” 

“If banks become dominant validators, power could become concentrated, reducing the decentralized nature of PoS networks,” Opryshko told Cointelegraph on March 12.

The additional financial inflows into PoS networks could also suppress staking yields, potentially undermining smaller validators, he added.

“If major institutional players, such as banks, enter the staking market and suddenly stake large amounts, […] it could cause a sharp reduction in staking rewards for all other participants,” Opryshko said. 

Staking yields as of March 12. Source: Staking Rewards

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As of March 12, Ether stakers earn approximately 5.5% APR, and Solana stakers earn close to 8%, according to data from Staking Rewards. 

Staking involves securing blockchains by posting crypto as collateral with validators in exchange for rewards.

Debanking debacle

The OCC’s announcement came after US President Donald Trump vowed to end a prolonged regulatory crackdown that restricted crypto firms’ access to banking services.

Crypto industry outrage over so-called “debanking” reached a crescendo when a June 2024 lawsuit spearheaded by ​​Coinbase resulted in the release of letters showing US banking regulators asked certain financial institutions to “pause” crypto banking activities.

In a Jan. 23 executive order, Trump — who has vowed to make America the “world’s crypto capital” — told agencies to prioritize “fair and open access to banking services” for digital asset firms.

As of March 12, Anchorage Digital is the only federally chartered US bank to offer cryptocurrency staking.

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