Can Crypto Trading Ever Recover After October’s Liquidity Crash?
Crypto markets might look calmer after October’s leverage wipeout, but under the surface, liquidity remains absent.
Data from CoinDesk Research shows that order-book depth across major centralized exchanges remains structurally lower, suggesting a more cautious market-making environment heading into year-end.
This environment paves the way for thinner markets and sharper moves, increasing the likelihood that routine trading flows will produce outsized price swings.
Vanishing liquidity
The October liquidation cascade erased billions in open interest in a matter of hours, but it also triggered something more subtle and far more persistent: an exodus of resting liquidity from centralized exchanges.
The damage is most apparent in the two…
