Crypto Market Momentum Weakens as Trading Volume Declines 20%

Crypto trading volume has been declining since its peak on February 27, according to data from Santiment. This decrease in trading volume, despite slight price increases, is seen as an early warning sign of weakening market momentum. The total crypto market capitalization has also experienced a loss, indicating a broader trend of waning trader enthusiasm and market momentum.

Bitcoin, the leading cryptocurrency, has shown renewed strength with price action approaching the last remaining CME Gap at $84,790. The TBT Bullish Divergence Signal from Tuesday has held up well, with daily RSI forming a higher low. However, on-balance volume remains bearish, and Bitcoin is still trading below the daily TBO Cloud. This situation highlights the volatility and uncertainty in the market, with many traders remaining skeptical about whether this is the real turning point for a meaningful reversal.

On the weekly time frame, Bitcoin is significantly oversold from a price perspective, but the weekly RSI did not close below 25, which is a positive sign. The short-term target remains at $89K, where Bitcoin is likely to encounter resistance. If BTC reaches this level, it is expected that many futures traders will get liquidated—both those shorting too early and those longing too late. This underscores why spot trading remains the safer approach in these volatile conditions.

Ethereum, the second-largest cryptocurrency, continues to underperform the broader crypto market, showing no significant bullish signals. The ETH/BTC ratio reflects this weakness, reinforcing the notion that Ethereum remains deeply bearish. Until Ethereum starts printing reversal signals and attracting stronger volume inflows, its trend is unlikely to change.

Stablecoin dominance has declined, which is generally seen as a bullish sign for the broader crypto market. However, for confidence to return, this trend must continue. While the daily TBO Cloud remains green, indicating an uptrend, the TBO Slow line remains relatively flat, suggesting that the momentum behind the decline is not yet strong enough to call a full market recovery. It is a positive sign that stablecoin dominance was rejected at the 8.22% TBO Resistance level. However, further downside is needed to confirm that market sentiment is shifting toward risk-on behavior.

Bitcoin dominance appears poised for a pullback, mirroring its movements from November 2024. A combination of TBT Bearish Divergence and multiple TBO Close Long signals suggests that BTC.D is preparing to decline. Daily RSI also supports this view, as it continues to struggle to push above 70. Top 10 Dominance remains on track, reflecting the relative strength of larger-cap cryptocurrencies. However, OTHERS.D, which represents mid- and low-cap altcoins, has yet to show the same bullish momentum. While daily RSI continues to form higher lows, altcoins still need to push into the daily TBO Cloud to confirm a broader recovery.

The total crypto market cap briefly tested overhead resistance, a level that has been a major hurdle since late February. Although price action remains sluggish, the higher low on daily RSI from earlier this week is a strong signal of potential reversal strength forming. For the total market cap to establish a clear uptrend, two things must happen. First, the market needs to push back inside the daily TBO Cloud. Second, on-balance volume must move above its white moving average line, indicating that buying pressure is returning.

One area of concern remains with OTHERS market cap. Despite recent gains, on-balance volume failed to break above resistance. The last two daily green candles have been encouraging, but significant volume is needed to push OBV back above this key level. If volume does not increase, altcoins may struggle to gain momentum.

BVOL7D, which tracks Bitcoin’s volatility, has been slowly declining from its rejection zone rather than dropping sharply as it has in the past. This unusual behavior suggests that BTC could still experience further unexpected moves before settling into a stable trend. While daily RSI has already dropped below overbought territory, the slow decline in BVOL7D indicates that traders should remain cautious about potential market swings.

Solana printed a TBT Bullish Divergence Cluster on yesterday’s close, a strong bullish reversal signal. It has managed to hold within its support range, and the next challenge is breaking above overhead resistance at $140. If SOL can reclaim this level, it would mark a significant technical shift. XRP remains one of the strongest-looking altcoins, having never closed below the daily TBO Cloud during the recent sell-offs. However, it still needs to push above its current resistance level at $2.38 to confirm a bullish continuation. Bitcoin Cash has printed a second TBO Close Short, which in this case is a bullish reversal signal. BCH often exaggerates Bitcoin’s moves due to its historical ties, making it a strong trading asset rather than a long-term investment.

Mantle (MNT) has had a difficult time since the Bybit ETH hack on February 21st, losing an additional 35% after that event. However, this week has been a strong recovery period, with a TBT Bullish Divergence signal on Tuesday, an OBV cross above its moving average, and a break above the first resistance level yesterday. S (formerly FTM) continues to hold TBO Support and saw an RSI Reset this week, making it a strong candidate for short-term gains. The four-hour chart has printed multiple TBT Divergence signals, indicating an increasing probability of a reversal.

Although the market has tested traders' patience with repeated failed reversals, the signs pointing to a recovery have been consistent. The bullish reversal scenario has been building for weeks, but continuous delays and manipulation have made the process frustrating. For those holding positions that have yet to close in profit, it is important to remember that staying patient and following a structured trading plan remains the key to long-term success. Many traders bought in too early, but as long as risk management is in place, those positions still have a high probability of recovering. As always, patience pays.