Bitcoin News Update: Is the Recent Decline in Crypto Liquidity a Short-Term Hurdle or a Permanent Change in Market Structure?
- October 2025 crypto crash reduced Bitcoin/ETH order-book depth by 30-25%, signaling structural liquidity withdrawal by market makers. - Stablecoin sector lost $840M since Nov 15, compounding fragility as weak volumes amplify price swings from routine trades. - Macro factors like ETF outflows ($360M weekly), Fed policy shifts, and Trump's tariff removal deepen liquidity challenges. - Thinner liquidity regime increases volatility risks for delta-neutral strategies, with even minor macro events triggering s
The cryptocurrency market crash in October 2025, which wiped out billions in open interest and sparked a mass withdrawal of liquidity, continues to weigh heavily on digital asset trading.
In early October, Bitcoin’s average order-book depth at 1% from the mid-price was $20 million, but by mid-November, it had fallen to $14 million. Meanwhile,
Broader economic factors have also contributed to the liquidity crunch.
The impact of diminished liquidity is extensive.
With the end of the year approaching, the market remains on unstable ground. Although some altcoins have shown relative strength, Bitcoin and Ether are still operating in what analysts call a “thinner liquidity regime,”
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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