Bitcoin Market Cap Analysis: Volume, Momentum, and the Bull Score

Key Insights: 

• Bitcoin's market capitalization reached $2 trillion in 2025, but falling volume equated to falling momentum, and thus it triggered a dramatic price correction.

• The recovery in 2023-2024 came at the same time as growing trading volume, which proved that investor behavior played a role in maintaining bull trends.

• Below 40 on the Bull Score, there is long-term bearishness, weak sentiment, and volume potentially holding back Bitcoin from returning hard.

Bitcoin market capitalization experienced extreme volatility from the years 2020 to 2025 as if it captures fascinating price trends and volumes. The chart depicts certain bear and bull cycles, which represent the volatility and episodic nature of the asset.

Market Movements and Volume Trends

From the start of 2020 to the close of 2021, the market capitalization of Bitcoin surged above $1 trillion, a record level. The rally was backed by strong trading volume, i.e., high investor appetite.

Source: CoinMarketCap

Market performance peaked in early 2021 before correcting forcefully to bring down lower market capitalization below $750 billion. It was sustained by shrinking volume, confirming reduced buying pressure in the downtrend.

Cycles in the market have a hugely high volume-correlated price move. Tops of Bitcoin's market cap have never been preceded except by higher volumes, affirming the place investor activity has as a driver in determining direction. In periods of bull trends, increasing volume has justified breakouts in prices and decreasing volume tended to initiate correction.

In 2025, the Bitcoin market cap was nearly $2 trillion before a sharp fall. The correction followed after volumes had been declining for a while, confirming weakening momentum.

Historically, it can be observed that price appreciation is only possible with continuous support from volume, confirming the supremacy of liquidity in maintaining rising trends. Corrections should follow as long as volumes are low.

The price of Bitcoin stabilized in late 2021 but could not support another breakout as conditions in the markets declined. Market capitalization declined consistently in 2022 to a low of about $500 billion.

Sluggish trading volume throughout this time was a sign of reduced investor demand, which worked to suppress price upward movement. Reduced involvement worked to prevent Bitcoin from reclaiming previous highs, and bearish market conditions were duly sustained.

By early 2023, Bitcoin began to recover, with market capitalization slowly rising above $750 billion. This was accompanied by positive volume trends, which reflected rejuvenating buying interest.

Bitcoin market capitalization increased to more than $1.5 trillion in 2024 as price action remained on a strong bullish trend. High volumes accompanied significant rallies that recorded higher volumes on the upsides in the market.

Bitcoin Price Momentum and Market Strength

A technical report conducted by market analyst Julio Moreno examines Bitcoin's Bull Score Index and how it is aligned with price action.

According to Moreno's report, Bitcoin's Bull Score dipped to 20 recently, its lowest level since January 2023. Below 40 indicates weaker market conditions, which suggest less bullishness.

Source: Julio Moreno

Julio Moreno's analysis indicates that Bitcoin rallies are commonly observed when the Bull Score is greater than 60. For 2024, Bitcoin featured a high Bull Score, in line with its upward trend.

However, he indicates that the recent score decline marks a greater danger of sustained weakness in the markets. If the Bull Score for Bitcoin remains low at below 40, conditions for bears will persist over the next several months.

Moreno also emphasizes that volume remains a key factor in sustaining market strength. A prolonged period of low volume, he argues, would also go on to suppress price recoveries, cementing bearishness.

Alternatively, fresh buying interest can revive Bitcoin's bull trend, driving another surge towards a breakout. The short-term market situation of Bitcoin will depend on whether sentiment and volume turn better for the good in the near future.