Low liquidity continues to make the market volatile, affecting major cryptocurrencies.
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The cryptocurrency market made a cautious start to the week due to concerns over valuations in tech stocks and mixed signals from the US Federal Reserve. Bitcoin $90,357.50 saw a slight decrease of 0.5%, holding at $89,600, while Ethereum $3,093.86 traded around $3,120. Other cryptocurrencies like XRP, Solana $132.93 (SOL), and Dogecoin $0.1377 (DOGE) experienced notable declines of up to 2%.
ContentsInvestors Seek Safety as Trading Volume DeclinesLow Liquidity Incites Volatile Movements Investors Seek Safety as Trading Volume Declines
The sell-off over the weekend, which predominantly affected tech-related stocks, also impacted the crypto market. Despite a mild recovery of futures indices during the Asian session following steep drops in US markets, investors are questioning the sustainability of high valuations through 2026. This cautious atmosphere has led to reduced trading volumes in the crypto market, resulting in more pronounced price movements.
Jeff Mei, COO of the BTSE exchange, noted that investors have not yet recovered from the October downturn. He stated, “Investors are wary of the overvalued US stocks and the Federal Reserve’s ambiguous messages. Yet, inflows into Bitcoin ETFs remain positive, and the Fed’s securities purchases continue to boost market liquidity.” Mei suggests that although year-end profit-taking might intensify selling pressure, investors are considering taking new positions at the beginning of 2026.
Low Liquidity Incites Volatile Movements
Augustine Fan, Head of SignalPlus Insights, emphasized how the low liquidity environment in the crypto market is amplifying price fluctuations. He pointed out, “Continuing from Friday’s negative trend, sales led by Bitcoin and Ethereum are dragging other major altcoins down. Volumes have dropped significantly since October 10, and the sentiment has turned noticeably negative.”
Fan advised against overemphasizing short-term price movements, although he acknowledged that the general trend remains downward. He explained, “With low trading depth, hourly or daily movements don’t carry much weight. However, the current sentiment indicates that prices might soften until the end of the year.” Experts predict that the reopening of US markets in early 2026 and central banks’ liquidity support might provide a gradual recovery path for the markets.
You can follow our news on Telegram, Facebook, Twitter & Coinmarketcap Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
