Bitcoin’s Liquidity is shrinking with market depth of BTC listed on Barchart, a leading provider of real-time intraday charts of equities and commodities, hitting a 15-month low. Market depth refers to the total size and volume of open orders, bids and offers, and it takes an order of only 462 BTC to move the asset’s price by 1%. Crypto Market data provider Material Indicators shared a chart yesterday showing that due to high slippage caused by low liquidity, Bitcoin whales are forced to split their large buy and sell orders into smaller orders.

Meanwhile, Kaiko reported that trading volumes on the central exchanges declined in April after rising for three straight months. On the brighter side, however, the crypto market has grown significantly since the 2020 bull market and quarterly trading volume on Coinbase, the largest US exchange, has stabilized over the past few quarters.

Unfortunately, liquidity has decreased with both Bitcoin and Ethereum approaching one-year lows in 2% market depth. Furthermore, price discovery is now taking place in derivatives markets and Open Interest (OI) is on a downward trend.

The current Bitcoin price stands at $29,220, evidencing the lack of support since mid-April when the long positions buildup stopped as soon as funding flipped negative. The overall market status indicates no clear trend due to mixed funding but it becomes more clear that the future of Bitcoin price action largely lies in the hands of its futures.



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