Crypto Market Faces Liquidity Crisis as Trading Volume Hits Six-Month Low in 2025

Cryptocurrency trading volume has plunged to its lowest point in six months, according to data from The Block. Both centralized and decentralized platforms are witnessing reduced activity, with spot trading for Bitcoin and Ethereum hitting multi-month lows compared to futures, indicating a waning real demand in the crypto market.

The Block's data highlights a significant drop in spot market activity across exchanges. The 30-day moving average ratio of Bitcoin spot-to-futures trading has fallen to 0.19—meaning spot volume is just 19% of futures volume—the lowest since August 2024. Ethereum shows a similar trend, with its ratio dropping to 0.20, a level not seen since December 2023. Total spot volume across major platforms such as Binance and Coinbase mirrors this decline, reflecting a broader retreat in immediate buying and selling activities.

This downturn is not limited to exchanges. U.S. spot Bitcoin ETFs recorded a volume of $1.55 billion on Thursday, April 17, the lowest since March 25, while spot Ethereum ETF volume reached $177.79 million, the weakest since March 27, as reported by The Block. This trend aligns with the exchange data, as spot activity cools while Bitcoin trades within the $84,000-$88,000 range. The absence of new catalysts has led traders to prefer short-term gains from futures' leverage over the long-term price development of spot markets.

Conversely, futures markets are attracting more trader participation. Traders are increasingly engaging in leveraged contracts, betting on price fluctuations rather than holding assets directly. This shift indicates a general reduction in genuine demand for tokens within the crypto market, with traders' interest leaning more towards speculative activities.

Several factors may be contributing to this trend. High interest rates in traditional finance could be drawing capital away from crypto, as alternative yields attract investors. Unlike futures trading, which seeks short-term speculative opportunities amid uncertainty, spot trading is often viewed as a measure of long-term confidence, which currently appears to be lacking. Amidst macroeconomic signals and uncertainties related to Federal Reserve actions, traders are flocking to the more volatile futures market to seek short-term profits. The diminishing liquidity in the spot market also suggests that, following the favorable news of the U.S. presidential election in late 2024 to early 2025 and the subsequent crypto-friendly policy environment, the cryptocurrency market urgently needs to find its next innovative narrative or long-term growth driver to regain attention.