Crypto Markets: Why Big Moves Are Here to Stay

Crypto trading has changed a lot since October. The big crash that month didn't just wipe out billions in trades. It also made the market much thinner. Now, it takes less money to move prices up or down. This means traders can expect bigger swings in prices, both up and down. Bitcoin and Ethereum, the two biggest cryptocurrencies, have seen a big drop in liquidity. Liquidity is like the water in a river. More water means things flow smoothly. Less water means things get choppy. Right now, the river is very shallow. In early October, it took about $20 million to move Bitcoin's price by 1%. Now, it takes less than $14 million. That's a big drop. Ethereum saw a similar drop. This isn't just a temporary thing. It's a big change in how the market works. Altcoins, or smaller cryptocurrencies, had a different story. They also saw a big drop in liquidity during the crash. But they bounced back faster. However, they still haven't returned to their pre-crash levels. This shows that the market is still figuring out how to handle risk. The bigger picture isn't helping either. The economy is uncertain, and that makes market makers cautious. They're not putting as much money into the market as they used to. This means the market is more fragile than it looks. Even small events can cause big price swings. So, what does this all mean? It means the crypto market is in a new phase. It's more fragile and more volatile. Big moves are here to stay, at least for now. Whether this changes in the future is hard to say. But for now, traders need to be ready for a bumpy ride.