As the cryptocurrency space continues to grow, liquidity has become an important metric for any coin or token to be taken seriously by larger and institutional investors. And given the plethora of meme coins that quickly soar in price only to crash – not to mention rug pulls – centralized exchanges (CEXs) increasingly require that new crypto asset listings are supported by market makers to provide a baseline level of liquidity.
The quality of such market makers has occasionally come into question. Still, their presence does reflect best practices in traditional finance (TradFi) markets and has tended to result in deeper liquidity on CEXs compared to their decentralized exchange (DEX) counterparts, particularly for the coins with the largest market caps.
Average daily Bitcoin (BTC) trading volumes have slumped since January, when the price hit a new all-time high of $106,000, dropping from around $80 billion in December 2024 to $30 billion as the price approached $80,000. The lower level is in line with Bitcoin volumes in the third quarter of 2024.
However, crypto liquidity on the eight main exchanges has displayed a steadily increasing slope, indicating the availability of liquidity across depth levels, according to a Coingecko report sponsored by the Bitget exchange. The exchanges are Binance, Bitget, Bybit, Coinbase, HTX, Kraken, and OKX.
How does liquidity on altcoins compare to the leading crypto, and what does that indicate about the health of the markets in 2025?
CEXs Maintain Balanced Altcoin Liquidity
Liquidity measures how easily a trader can buy or sell an asset at the market price, with limited slippage. It also points to the likelihood of price volatility, as prices can fluctuate significantly if liquidity is low, with a single large order potentially causing a big swing in either direction.
Liquidity also generates liquidity, as a trader looking to take large positions would avoid assets with low liquidity if the market cannot support their order sizes.
DEXs rely on crypto liquidity pools rather than order books to hold pairs of tokens in smart contracts. Automated market makers (AMMs) price assets based on the ratio of tokens in the pool, allowing anyone to trade at any time, even if no one else is actively buying or selling, which is required on a CEX.
Centralized crypto exchange liquidity for the top five non-stablecoin cryptocurrencies – Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Solana (SOL), and Dogecoin (DOGE) – is generally healthy across various market depths, the report indicates.
“On most days, altcoin liquidity tends to be balanced on both sides of the orderbook, across all coins and all exchanges,” the report states.
However, market events can have a significant impact on liquidity on most exchanges, as traders crowd around key price levels on both the buy and sell sides.
Even during the most illiquid days during the two-month period from mid-March to mid-May, the least liquid exchanges had more than $500,000 in liquidity for the top assets within the +/-2% range.
How Does Altcoin Liquidity Compare to Bitcoin?
Liquidity on altcoins largely reflects their smaller size relative to Bitcoin.
Within the 0.1% range, which is +/-$2 range for ETH, liquidity is “quite healthy” across all eight main exchanges. Six of the eight have around $1 million or more in liquidity, and even the smallest, HTX, has around $430,000 of liquidity in this range.
However, while BTC maintains liquidity across depth levels, “the order books for ETH tend to be deeper at or close to the market price and taper off quicker on most exchanges.” This indicates that there is less liquidity on ETH than BTC beyond a certain threshold.
In turn, Solana liquidity is lower than the liquidity on ETH. SOL’s average daily trading volume was around $4.3 billion during the period covered in the report, which is around four times smaller than ETH. This is roughly in line with SOL’s relative market cap of $75 billion vs. ETH’s $270 billion.
Order books for SOL make up around 60% of ETH’s liquidity at the +/- 2% range. SOL exhibits deep liquidity at the +/- $1 (~0.6%) liquidity range, with around $20 million in liquidity on each side across the exchanges.
However, one of the liquidity issues in crypto is that not all exchanges can sustain their liquidity throughout the larger +/-2% range, as liquidity appears to taper off beyond the +/- $1.50 level. “Despite being one of the largest assets in crypto, liquidity for SOL can still swing heavily from news-driven events and technical indicators,” according to the report.
Although XRP has a much higher market cap than SOL, its average daily trading volumes are still lower, ranging around $3.8 billion.
A notable exception was when XRP’s victory in a lawsuit brought against it by the Securities and Exchange Commission (SEC) was announced in March – the price climbed by 11.4% from $2.29 to $2.55, and trading volume spiked to $10 billion.
There is typically less cumulative XRP liquidity on exchanges at the +/-2% depth level than SOL. At the +/- $0.02 (~1%) depth range, there is around $15 million one-sided liquidity, although the report notes this is still generally healthy.
Elon Musk’s Influence on DOGE Liquidity Fades
The liquidity profile for DOGE is different from the other coins, according to the report, reflecting its status as a meme coin.
DOGE’s daily trading volume is lower than that of the other major altcoins, averaging between $1 billion and $2 billion. However, this is consistent with its market cap of around $25 billion, relative to the market caps of SOL and XRP.
Although it is a meme coin, DOGE’s liquidity is still fairly balanced across the +/-2% range, albeit more concentrated around the current market price. At the +/-2% depth level, DOGE has around $10 million to $12 million in cumulative single-sided liquidity across exchanges, which is roughly half of XRP’s liquidity at the same depth. This is particularly healthy given the relative size of its market cap, the report states.
Elon Musk’s influence on the DOGE price by posting about the coin on X has largely waned, even more so when it comes to liquidity, the report notes, as DOGE moved in lockstep with BTC during the report period.
The DOGE liquidity curves on Binance, Coinbase, Bitget, and Crypto.com are relatively steep, indicating that liquidity is consistent across depth levels. This may suggest the presence of market makers, but there were also more visible limit orders on both sides, particularly during a run-up.
“During BTC’s recent run up to ~$100,000 in early May, it’s clear that not all coins caught the same bullish sentiment, some were backed by strong bidders, while other coins had traders waiting to exit on the bounce. Dogecoin proved an interesting case in the sense that there were large groups of buyers and sellers waiting to strike,” the report states.
“While instinctually liquidity in crypto should naturally react to market-wide events, this is much less obvious when we examine the BTC order book, but is much more apparent for altcoins, including ETH. An altcoin’s orderbook is much more sensitive to new project developments or even changes in sentiment.”
Technical Resistance Levels Support Altcoin Liquidity
Crypto market liquidity can spike when prices approach certain points, as traders move to defend key technical levels.
“As the ETH price fluctuated significantly during the study period, we could observe significant crowding of orders at key support/resistance price levels,” the report states.
For instance, on March 25, up to $2 million worth of bids were placed to protect the $2,000 level, with $3 million to $4 million in block orders at $10 intervals. Similarly, after a temporary rebound on April 10, $14 million in buy orders were placed on Binance to support the $1,600 level, increasing the bid depth from $9 million to $23 million.
“This is a clear indication that crypto liquidity and CEX market makers are highly sensitive within intraday time frames, since the snapshot was taken during a period of stability just shortly after,” according to the report.
A growing number of companies are acquiring crypto as part of their treasury, following the example of Michael Saylor’s MicroStrategy, and positive sentiment from these token acquisition announcements can also have a direct impact on order books.
When DeFi Development Corp. announced its acquisition of an additional $9.9 million of SOL on April 23, traders on certain CEXs were clearly positioned to act on the news. Bids on were much deeper than the sell side, stretching beyond the daily average.
The Bottom Line
Liquidity across cryptocurrencies reflects market size and popularity. While Bitcoin maintains deep and consistent order book liquidity beyond market price thresholds, altcoins like Ethereum exhibit shallower liquidity profiles, with order books that are dense near market price but thin out as prices move.
Sharp price fluctuations can result in clusters of orders at key support and resistance levels, indicating that traders anticipate and actively defend technical price levels.
For crypto project developers and investors navigating this space, understanding the dynamics of liquidity depth and sensitivity across asset types is essential, especially as the altcoin market matures.
