Crypto liquidity is not a background condition, it is a leading signal – The Armchair Trader
Dovile Silenskyte, Director, Digital Assets Research, WisdomTree
In financial markets, liquidity is often treated as a secondary variable – a derivative of price action, investor sentiment, or macro conditions. In crypto, it is the opposite. Liquidity is not the echo; it is the signal.
As the asset class matures and institutional adoption deepens, liquidity is becoming a barometer for market health, risk appetite, and even macroeconomic turning points. It is no longer just about who is trading—it is about why capital is moving, where risk is being priced, and how the next market cycle might unfold.
Liquidity signals crypto cycles
Traditional markets benefit from deep order books, regulated venues, and a mature set of standardised…
