BY Fintan Ng - November 27, 2018
Crypto liquidity dries up
Liquidity has fallen off the cliff in the crypto markets as wary traders continue to stay on the sidelines despite cryptocurrency prices having plunged 80% to 95% from the start of the year.
Crypto research outfit Diar says traders “are not taking a punt on the bargain”, with 60% of listed cryptocurrencies trading below January levels and that volumes have plummeted across major exchanges.
“Order books are now filled to the brim on the sell side with November, to date, seeing an acceleration in depreciating volumes,” it says in a Nov 26 report.
“Over 75% of the tokens that have been added to exchange this year have seen their volumes in complete decline October versus November,” it says.
Painting a bleak picture for 2018, it says over 20% of cryptocurrencies that remain listed on major exchanges now have less than 90% of the trading volumes witnessed at peak hype in January.
“More than half of those are effectively dead in the water with no traders looking to buy,” it points out.
Diar says liquidity differ among exchanges quite dramatically, with Asian crypto exchanges having more volume compared to US ones.
It says Hong Kong-based OKEx and Singapore-based Huobi are the outliers by reported volume while Binance has a fairly equal share of trading volumes across percentage bands.
Wilmington, Delaware-based exchange Poloniex’s listed tokens have less trading volume compared to the start of the year and only three of Seattle-based Bittrex have volume.