Hidden Weakness? Why Bitcoin’s Low Trading Volume Is a Major Warning Sign

• A major divergence has appeared between Bitcoin’s rising price and its declining monthly trading volume
• The volume that supported previous all-time highs was approximately three times higher than today’s levels
• Analysts warn this thin liquidity could lead to a sharp downturn if large holders begin to sell

Despite Bitcoin trading near record highs, a worrying on-chain signal is flashing a warning sign for the market. A multi-year decline in monthly trading volume has created a significant divergence with Bitcoin’s rising price, leading some analysts to caution that the current market is built on a fragile foundation of thin liquidity.

This analysis suggests that recent price gains, including the push beyond $100,000 in 2025, are less supported by broad market participation than in previous cycles, which could pose a risk if selling pressure increases.

Shift in Bitcoin’s Trading Volume

Between 2013 and 2017, Bitcoin saw strong institutional buying activity, as reflected in heightened monthly trading volumes. This period of strong liquidity served as solid market support, enabling Bitcoin to build a foundation for its long-term price appreciation. Volume data from this stage shows a clear peak coinciding with strong price advances, signaling active participation from institutional investors.

Volume Decline Accompanies Recent Price Gains

Since 2018, Bitcoin’s monthly trading volumes have declined, even as its price has continued to rise, reaching new all-time highs exceeding $100,000 by 2025. This gap shows that recent price gains are less dependent on broad market participation or retail trading and more influenced by concentrated buying from long-term holders and selective institutional investors.

Current market data displays a rising flow of Bitcoin from large holders, or “whales,” to exchanges. The ratio of Bitcoin moving onto exchanges is approaching a dangerous threshold, signaling potential selling pressure. Historically, resistance near $110,000 has proven strong, with previous attempts to surpass this level met by big sales, particularly from coins held since Bitcoin’s earliest days.

The volume supporting Bitcoin’s previous all-time highs was approximately three times higher than today’s levels. This contrast raises concerns about the market’s ability to sustain prices if coordinated selling resumes, especially given that high volume is necessary to maintain strong support levels.

However, market experts warn that any decline could be immediate and major, unfolding in an environment characterized by thin liquidity and low trading volumes. The reduced presence of active buyers may contribute to downward price moves if whales or institutional holders decide to liquidate positions.