Spot cryptocurrency trading activity on major exchanges has sharply declined since October, signalling waning investor participation amid deteriorating market conditions.
Analysts estimate that spot trading volumes have fallen from about $2 trillion in October to roughly $1 trillion by the end of January, pointing to reduced demand and growing risk aversion across the crypto market.
🗞️ Spot demand Is drying up : Bitcoin enters its 5th month of correction
We are now entering the 5th consecutive month of correction for Bitcoin.
This correction has been largely driven by the October 10th event, which led to a massive destruction of liquidity, particularly in… pic.twitter.com/rX2keResNG
— Darkfost (@Darkfost_Coc) February 2, 2026
Bitcoin (BTC) is currently trading around $78,202, down roughly 37.5% from its October peak, as liquidity tightening and investor pullbacks weigh heavily on prices.
Spot demand fades as Bitcoin correction deepens
According to CryptoQuant analyst Darkfost, the ongoing market correction has been driven largely by the October 10 liquidation event, which triggered a sustained drop in spot market activity.
“Spot demand is drying up,”
Darkfost said on Monday, noting that overall trading volumes on major exchanges have been cut in half since October.
Binance, the world’s largest crypto exchange by volume, clearly illustrates the trend. Bitcoin spot trading on the platform dropped from around $200 billion in October to approximately $104 billion in recent weeks, according to CryptoQuant data.
The decline has pushed trading activity to some of the lowest levels seen since 2024, reinforcing signs that investors are stepping back amid heightened uncertainty.
Liquidity pressure raises bear market risks
Falling volumes are not the only concern. Market liquidity has also come under strain, reflected in stablecoin outflows from exchanges and an estimated $10 billion drop in total stablecoin market capitalization, analysts said.
Alphractal founder and CEO Joao Wedson highlighted two key conditions that typically signal a Bitcoin market bottom. First, short-term holders (STH) must be holding coins at a loss, a condition that has already been met. Second, long-term holders (LTH) must also begin to realize losses, which has not yet occurred.
Wedson added that bear markets tend to end when the realized price of short-term holders falls below that of long-term holders, while bull markets usually begin once it crosses back above.
At present, the STH realized price remains higher than the LTH level. However, Wedson warned that a drop below the $74,000 support level could push Bitcoin firmly into bear market territory.
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