"False Bull Market" Emerges? Bitcoin Surge Masks the Truth of Price Increase with Shrinking Volume

Since the beginning of 2026, the crypto market has been on a fiery rise, with Bitcoin repeatedly hitting new highs. However, this seemingly glorious surge hides alarming warning signs. According to the latest statistics from on-chain data provider Glassnode, despite the continuous price increase, spot trading volume has experienced a severe contraction—this is a classic case of “rising prices with shrinking volume,” indicating market fragility behind the apparent prosperity.

Trading Volume Stalls, the Market Crisis Behind Price Rise with Shrinking Volume

Data shows that the total spot trading volume of Bitcoin and competing coins has fallen to its lowest point since November 2023, with the current 24-hour trading volume dropping to only $145 million. This abnormal phenomenon of “price rising with no volume” is often seen as a warning signal in traditional financial markets.

Spot trading volume reflects the true inflow and outflow of funds within exchanges and is a key indicator of market participation. In a healthy bull market, rising prices are usually accompanied by increasing trading volume—indicating continuous new capital inflows and gradual rotation of existing holdings. However, the current “price up, volume down” situation suggests that the amount of capital needed to push prices higher is decreasing, meaning that even slight selling pressure could cause prices to plummet rapidly. In other words, this rally lacks genuine market consensus support.

Liquidity Bleeding Out, the Aftermath of October 2025 Liquidation Wave Still Lingers

Tracing back to the root cause, the liquidity crisis on centralized exchanges stems from a massive liquidation wave in October last year. During that period, about $19 billion of highly leveraged positions were forcibly liquidated within just a few hours, destroying over-leveraged speculative positions and profoundly altering the market’s liquidity structure.

After the liquidation wave, market makers and liquidity providers chose to withdraw, leading to order book depths on exchanges remaining below pre-crash levels. This means the market has lost its original “buffer zone”—the capacity to absorb large orders has significantly diminished. In this environment of liquidity exhaustion, any sizable trade could trigger more severe slippage and price volatility.

Once Selling Pressure Surges, How Will an Unprotected Market React?

Currently, Bitcoin is priced around $90,360, with a gain of about 7% since January 1. However, experienced traders have already noticed that this rally is somewhat illusory—it is built on extremely low liquidity.

If any major negative news or large holders panic and start selling, the market lacking sufficient liquidity to absorb such moves will face the risk of “slippage.” The apparent market prosperity now is akin to dancing on a frozen surface of liquidity—glamorous but hiding the danger of thin ice breaking. In the face of this strange phenomenon of “rising prices with shrinking volume,” caution and vigilance have become essential lessons for the current market.