• Bitcoin markets are currently exhibiting low volume and volatility.
• This could be a sign of another leg lower, but is more likely indicative of a complacent and decimated market.
• The destruction of FTX and Alameda has caused a major drop in overall market depth and liquidity.
The state of the Bitcoin market is becoming increasingly concerning, as the volume and volatility have taken a sharp downturn in recent months. After reaching peak levels in September and November of 2021, the volume in both the spot and perpetual futures markets have been steadily declining. This has caused a noticeable lack of market depth and liquidity, which has been further exacerbated by the recent collapse of FTX and Alameda.
The low volume and volatility could be indicative of another leg lower to come in the market. If that is the case, then the most market pain can be felt in the form of an extended waiting period for a clear change in trends. This is because bitcoin price has yet to experience the type of explosion in market volatility that has defined major pivots and directional moves in the past.
The current state of the bitcoin market is highly concerning and could be a sign of further declines on the horizon. However, it is also likely a sign of a decimated and complacent market, with few participants willing to take the risk. Whatever the case may be, it is important for investors to remain vigilant and keep an eye out for any changes in trend that could signal a major shift in the bitcoin market.