As was somewhat to be expected based on the current crypto market momentum, numerous currencies note a high influx of liquidity across exchanges. That situation affects Bitcoin and Ethereum as much as several stablecoins. More liquidity on trading platforms will often yield more volatility, keeping prices down for some time to come. 

More Liquidity Keeps Posing Problems

While one can argue crypto markets need sufficient liquidity, it is often best to keep this to an absolute minimum. More specifically, if demand outweighs the supply, the prices tend to go higher over time. As there is now too much liquidity across all centralized and decentralized platforms already, the bear market will likely continue for a few more days, if not weeks. 

Per Viewbase, the most significant influx of new coins comes from Bitcoin. Not in the BTC amount, as an overflow of over 2,000 BTC is not out of the ordinary. In USD value, this represents an increase in liquidity by over $74.4 million, which is relatively high during the weekend. In comparison, this amount is nearly four times higher than Ethereum’s positive netflow of $19.196 million. 

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BlocDesk Liquidity Increases
Source: Glassnode

Other currencies noting a strong influx in liquidity include the stablecoins – BUSD, HUSD, USDC, USDK, and DAI – as well as Wrapped Bitcoin. That latter part is anything but surprising, as the tokenized version of BTC on the Ethereum blockchain has the same value as regular bitcoins. Due to this ongoing market slump, there is no special reason not to trade WBTC back and forth. 

Beyond these currencies, there are a plethora of altcoins with an increasing exchange balance. The likes of NEXO, MATIC, FTT, COMP, and SNX are all noting minor increases today. None of the values are high per se, but it shows there may be a bit more volatility for these assets over the coming days and weeks. For traders and speculators, that is something to keep an eye on. 

USDT Outflow Takes The Crown

On the other side of the spectrum, there are currencies and assets with a negative daily outflow. Surprisingly, Tether’s USDT remains the undisputed leader on this dashboard. Of course, fewer USDT on exchanges is not entirely abnormal, yet a decrease by nearly $47 million in a day tells an intriguing tale. It is even more interesting because all the other major stablecoins note decently-sized liquidity increases. 

BlocDesk Liquidity Decreases
Source: Glassnode

The same applies to TUSD, although its decrease in balances is just $4.2 million. Other than these currencies, mainly altcoins and DeFi assets are noting a decrease. Uniswap and Serum lead the pack ahead of Swipe, ADX, and Chainlink. An intriguing collection of assets with decreasing exchange liquidity. 

It is difficult to determine what all of this means for the broader cryptocurrency industry. Users cannot expect any immediate market changes under these circumstances. Although the differences in liquidity are not spectacular by any means, the ongoing trends are worth keeping tabs on. Until Bitcoin recovers, the alternative markets will struggle as well. So far, that Bitcoin recovery remains rather unlikely.