• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Short and Funny Sayings for a Happy Summer with Friends

May 9, 2025

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Friday, May 9
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025

    Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

    May 7, 2025

    ‘Wait Them Out’: John Kennedy Tells Larry Kudlow One Lie He Suspects China’s Telling US

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Finance»Bitcoin (BTC) is up 12% this month in part due to thin liquidity
Finance

Bitcoin (BTC) is up 12% this month in part due to thin liquidity

June 26, 2023No Comments6 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
DCG-owned crypto exchange Luno loses top global exec as woes mount
Share
Facebook Twitter LinkedIn Pinterest Email

Andriy Onufriyenko | Moment | Getty Images

Bitcoin has rallied sharply this month — but not for reasons you might think.

The world’s largest digital currency has risen more than 12% since the beginning of June. On Wednesday, its price topped $30,000 to hit its highest level since April 14, according to Coin Metrics data.

Market players have attributed the jump to the news that U.S. asset management giant BlackRock had filed for a spot bitcoin exchange-traded fund tracking the market price of the underlying asset.

While that may be part of the reason, the outsized moved can be put down to another factor beyond the news flow surrounding large institutions taking steps to embrace bitcoin or other digital assets.

Thin liquidity and big players

Crypto “market depth” has been sitting at very low levels this year. Market depth refers to a market’s ability to absorb relatively large buy and sell orders. When market depth is low and big players put in orders to buy or sell digital coins, prices can move in a big way up or down, even if the orders are not that huge.

Market depth is a measure of liquidity in a market.

According to data firm Kaiko, bitcoin’s market depth has fallen 20% since the start of this year. Bitcoin has been one of the hardest-hit cryptocurrencies in terms of market depth, Kaiko said.

The market depth of bitcoin at a 1% range from the mid price has fallen about 20% since the start of the year, according to data firm Kaiko.

Kaiko

“Bitcoin’s recent surge in value has largely been driven by large trades within a less liquid market,” Jamie Sly, head of research at CCData, told CNBC via email.

“Our analysis of market orders over 5 BTC reveals an aggressive surge in market buying, suggesting large players are seeking to gain exposure to digital assets.”

“When combining large orders with thin books, the market is subject to more volatile movements,” Sly added.

That lack of liquidity has in part been driven by the regulatory scrutiny of the crypto industry from U.S. authorities. The Securities and Exchange Commission has sued major exchanges such as Coinbase and Binance.

Low liquidity, which has been a feature of the crypto market all year, is also partly behind bitcoin’s 80% year-to-date rally.

Retail traders aren’t back — yet

Another notable feature of the current crypto market is the low volumes being traded on exchanges.

Daily trading volume in the cryptocurrency currently sits at around $24 billion, according to crypto data website CoinGecko.

That’s down markedly from the more than $100 billion of overall trading volume in bitcoin during the peak of the 2021 crypto rally, when bitcoin rose close to an all-time high of nearly $69,000.

Large crypto investors usually hope that an early surge in prices will be enough to tempt retail investors back into participating in the rally which ultimately boosts prices for bitcoin and other digital coins. But that hasn’t happened.

“What is notable about this rally is that trade volumes overall are at multi-year lows, and we are only seeing a slight increase, which even then is far lower than levels we saw from January to March,” Clara Medalie, director of research at Kaiko, told CNBC.

“I think trading volumes and price volatility are two of the most telling indicators of crypto market activity. Both volatility and volumes are at multi-year lows, and even a rapid increase in price is not enough to draw traders in.”

‘It’s not a market for ordinary clients’

In the last bitcoin cycle, market momentum was largely driven by big, institutional names as investment banks from Morgan Stanley to Goldman Sachs set up trading desks to give their clients exposure to the digital currency.

However, the market really started to break out only when retail traders started to take notice — in early 2021, people became tempted by the phenomenon that was NFTs, or nonfungible tokens, and other more speculative bets.

Later that year, the cryptocurrency market experienced a seismic rally, with the price of bitcoin zooming to unprecedented levels. That was in tandem with surging trading volume, which climbed from $21.2 billion at the start of 2020 to $105.4 billion on Nov. 9, 2021, when bitcoin hits its all-time high, according to CoinGecko.

Today, trading volume is nowhere near where it was at the height of the 2021 crypto boom.

“Any bit of news, if it’s good, then the professional traders trade — otherwise, they’re not trading,” Carol Alexander, a professor of finance at the University of Sussex, told CNBC.

“If a bit of good news like the bitcoin ETF comes, they fire the cannons upwards.”

BlackRock’s ETF filing was followed by similar move from Invesco and WisdomTree, which also filed for their own respective bitcoin-related products.

FTX's collapse is shaking crypto to its core. The pain may not be over

“Bitcoin and ether are both being manipulated in this way by the professional traders. They don’t trade most of the time, they wait until there’s a bit of good news,” Alexander said.

“Then they’ll sell the top and you’ve got a sideways market.”

Indeed, bitcoin has traded within a range this year, and attempts to burst significantly higher have been thwarted.

Alexander thinks bitcoin is likely to trade within a range of between $25,000 and $30,000 for the remainder of the summer.

She expects, however, that toward the end of the year, the cryptocurrency will climb toward $50,000, citing attempts from larger market players to prop up the market, with big purchases making outsized moves.

“It’s not a market for ordinary clients. It’s really is not,” she warned.

Has the market bottomed?

Vijay Ayyar, vice president of international markets at the Indian crypto exchange CoinDCX, told CNBC he suspects the latest run-up in bitcoin’s price is being driven more by “long term institutional buyers.”

Big funds and crypto-focused hedge funds are among the market participants driving the action, Ayyar added.

“I don’t think this is as much of a retail push, since retail was quite flushed out during the recent pullback,” he said.

Several crypto industry insiders have expressed hopes that the market is nearing a “bottoming” period where it can start to rise again.

The recent price action echoes activity in 2018, when both bitcoin’s price and volumes were subdued for several months before beginning to rise again the following year.

However, CCData’s Sly said it is “still too early to say whether the worst is over for bitcoin.”

“The recent wave of interest from traditional financial institutions, like Blackrock, Citadel, and Fidelity instils a renewed optimism in the market,” he said.

“Provided the wider macro environment and equity markets continue to be favorable, it is possible that bitcoin could maintain its current positive price trajectory.”

WATCH: Can ethereum topple bitcoin as the crypto king?

Can ethereum topple bitcoin as the crypto king?
See also  Peloton Recalls 2 Million Exercise Bikes Due to Safety Concerns
Bitcoin BTC Due Liquidity month part thin
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

‘Exactly What We Want To See’: US Job Growth Beat Expectations For Second Month In A Row

May 2, 2025

80 Short June Quotes to Welcome This Beautiful Month and a Happy Summer

April 29, 2025

Corporations Pull Support From Pride Month, Leaving Groups In Lurch

April 28, 2025

110 Inspirational June Quotes for a Positive, Fun and Happy Summer Month

April 28, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Russia Accuses Ukraine of Using Cluster Bombs in Donetsk

August 8, 2023

It’s ‘Very Difficult’ to Be a Jew in the Democratic Caucus, There’s ‘Seemingly a Lack of Progressive Love’

November 4, 2023

Fox Host Calls The Claims Aired By His Network ‘Obviously False’ Amid Settlement News

April 19, 2023

Russia Now Conducting Strikes Just 200 Yards From NATO’s Frontier

August 6, 2023
Don't Miss

Short and Funny Sayings for a Happy Summer with Friends

Lifestyle May 9, 2025

I love the beach. Just looking at the calming sea to relax. Having fun in…

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,110)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,627)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

Vague warning language impacts perceptions of vaping risks, study finds

June 28, 2023

Member Of Ron DeSantis PAC Caught On Camera Saying ‘Eat My B—s’

July 15, 2023

Former Arkansas Gov. Asa Hutchinson Announces Presidential Run

April 2, 2023
Popular Posts

Short and Funny Sayings for a Happy Summer with Friends

May 9, 2025

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.