The liquid situation in the bitcoin (BTC) and ether (ETH) market continues to worsen and the current situation is more dangerous than it was three months ago. This worries traders about the wild price changes in the crypto market. Liquidity refers to the market’s ability to make large purchases and sales at stable prices. A commonly used metric for evaluating liquid conditions is 2% of market depth – the amount of buy and sell offers within 2% of the average price or the average of the price and ask/ask price. The greater the depth, the more the material is said to be liquid, and vice versa.
Data from the Paris-based crypto data provider Kaiko shows a 2% drop in the bitcoin market for USDT paired with a 15-day central exchange down to 6,800 BTC, the lowest since May 2022, more than when FTX was lower. This is a significant drop from October’s high of over 15,000 BTC. The depth of 2% of Ether has dropped to more than 57,000 ETH since October, led by Binance. Matthew Dibb, chief investment officer at Astronaut Capital, said: “Lower liquidity means stronger movement, especially in alternative cryptocurrencies.”
“Money tries to trade the size that forces TWAP in the long term (days or weeks), so it looks like some charts are ‘overwhelmed’ like STX” recently. TWAP, or long-term value, is a popular algorithm that focuses on obtaining an average trade execution price that is close to the long-term value. In other words, it involves dividing large processes into small quantities and doing them at any time to reduce the impact on the current market and reduce interruptions. Slippage is the difference between the expected price at which the trade is placed and the actual price at which the purchase/sale is made. Slippage usually occurs when market capitalization is low or volatility is high. “However, of course, the reduction in market depth also means that many large funds do not participate at the same level as before due to the number of withdrawals,” said Dibb, adding that large companies every current coin exporter will have. deep impact on the market.
