Why Crypto Trading Volumes Are Cooling

[Chawla Solutions]

Crypto trading activity has taken a noticeable pause, and the latest volume data makes that clear. In December, spot trading volume on centralized exchanges dropped to $1.13 trillion, the lowest level since September 2024. That’s a sharp 32% decline compared to November and nearly a 50% fall from October’s peak. Decentralized exchanges followed a similar trend, with total DEX volume sliding to $245 billion, down 20% month-over-month and 46% from October.

This cooling doesn’t necessarily signal weakness in the broader crypto market. Instead, it reflects a shift in trader behavior. After a volatile and highly active period earlier in the quarter, many participants appear to be stepping back, reducing leverage, and waiting for clearer macro or market signals. Lower volumes often emerge during consolidation phases, when prices move sideways and conviction temporarily fades.

Another factor is liquidity concentration. Bitcoin has been absorbing most of the available capital, leaving altcoins and smaller markets with less trading activity. At the same time, regulatory uncertainty and year-end portfolio adjustments have likely pushed institutions to slow down, contributing to reduced exchange flows.

Interestingly, DEX volumes remain relatively resilient compared to historical norms, suggesting that on-chain trading has become a structural part of the market rather than a temporary trend. Users are still active, just more selective.

Periods like this tend to reset excess speculation. While quiet markets can feel unexciting, they often lay the groundwork for the next major move. Declining volume is not the end of the cycle — it’s often the pause before momentum returns.