CEX Spot Volume Collapses from $4.5T to $2.7T in Q1

The cryptocurrency market has entered a "sustained crypto winter," according to a quarterly report by CoinGecko. The top 10 centralized exchanges (CEX) by spot volume recorded a 39% decline in trading activity during the first quarter of 2026, falling to $2.7 trillion from $4.5 trillion in Q4 2025. Total crypto market capitalization dropped by more than 20% over the same period.

Why This Downturn Is Different

This is not a routine correction. CoinGecko's report stated that "bearish momentum from late 2025 collided with global geopolitical instability," accelerating the market-wide decline.

Risk aversion intensified following U.S.-Israeli strikes on Iran in February, which amplified fears of an economic slowdown across global financial markets. Crypto markets failed to recover through March.

The nomination of Kevin Warsh as the next Federal Reserve chair also weighed on sentiment. CoinGecko described it as signaling "a potential hawkish shift in U.S. monetary policy," further chilling investor appetite.

March proved to be the weakest month of the quarter, with trading volume hitting just $800 billion — the lowest since November 2023. Average daily trading volume for Q1 came in at $117.8 billion, down 27% quarter-on-quarter.

Bitcoin Underperforms Even Equities

Bitcoin fell 22% in Q1, underperforming both the Nasdaq (-7.1%) and S&P 500 (-4.8%), which posted their worst quarterly returns since 2022. Despite Bitcoin's record high of over $126,000 six months ago, it has failed to sustain upward momentum.

HTX Leads Declines Among Top Exchanges

All top 10 spot CEXs recorded volume declines. HTX, formerly Huobi, suffered the sharpest drop — down 55% quarter-on-quarter to $133.6 billion, the steepest fall among the group.

Outlook [Expert Analysis]

Industry observers suggest the market is likely entering a prolonged structural adjustment rather than a short-term dip. Institutional risk-off positioning is likely to persist until clarity emerges on Fed policy direction.

However, some analysts note that Q1's trading floor echoes November 2023 levels — a period that preceded the 2024–2025 bull cycle — suggesting the possibility that current conditions could mark the beginning of the next recovery phase.

Three key variables are likely to shape Q2: U.S. monetary policy trajectory, Middle East geopolitical risk, and any shifts in regulatory posture toward digital assets.