Someone suggsted that the low volume is due to the Spring break in US universities. I have been trying to find out if this weekend is especially significant in China, without much success. It seems that some universities start classes around this time, but others don't. Any clues?
I thought that perhaps the non-Chinese exchanges are the source of volatility, in spite of their small volume. Namely, 1 BTC of trade at Bitstamp moves the price by some amount, then arbitragers propagate the change to Huobi, and traders at Huobi react by swapping 10 BTC among themselves before settling more or less where they were before and propagating that back to Bitstamp. Thus, with the western markets shut down because of Spring break, the Chinese ones just sit still. Makes sense?
EDIT: one argument: in the Chinse exchanges the only asks and bids are for speculation inside the exchange, whereas outside China there are asks and bids that are generated externally, eg. by people who want to buy things with bitcoin.