The post Can Crypto Trading Ever Recover After October’s Liquidity Crash? appeared on BitcoinEthereumNews.com.

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 assets that anchor the entire market. In early October, just before the wipeout, bitcoin’s average cumulative depth at 1% from the mid-price hovered close to $20 million across major venues, according to CoinDesk Research data. By Nov. 11, that same measure had slipped to $14 million, a decline of nearly one-third, the data showed. Market depth is a metric used by traders to assess the scale of liquidity in a market. At a 1% range, this assesses how much capital would be required to move the market by 1%, taking into consideration the cumulative value of all limit orders on the book. A thin book could deter traders looking to buy or sell higher volume as it would quite often cause slippage, which is where price deviates to an area where liquidity is sufficient. BTC liquidity (CoinDesk Research) Depth at 0.5% from the mid-price fell from close to $15.5 million to just under $10 million, while depth at the broader 5% range dropped from more than $40 million to slightly below $30 million. Ether shows an almost parallel pattern. On Oct. 9, ETH depth at 1% from the mid-price sat just above $8 million,…

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Filed under: News - @ November 15, 2025 3:27 pm