The Bitcoin and crypto markets have outperformed the global equities market in the first quarter of 2023, according to market data from TradingView. Bitcoin has gained approximately 70 percent in value during Q1, reclaiming its market capitalization of half a trillion following heavy liquidations last year. However, Bitcoin price has traded around $27.7k during the early Asian market, down 2.5 percent in the last 24 hours.
Liquidity is a crucial factor in the crypto market, as it is a top barometer for the state of crypto health to most analysts. Moreover, the altcoin market has a significant correlation with Bitcoin’s liquidity. With governments and institutional investors tapping into the crypto market, liquidity has become even more critical.
Regulatory Scrutiny and Liquidity Challenges
The ongoing cryptocurrency regulatory scrutiny in the United States has significantly affected the overall crypto liquidity in the industry. Furthermore, USD off and on ramps have significantly been phased out as stablecoin pairs become more popular.
“It’s more indicative of the institutional reluctance to offer liquidity in the space. A lot of crypto firms don’t want to get caught in the middle of a battle between US regulators and exchanges,” Conor Ryder from Kaiko noted.
Also Read: Bitcoin & Altcoins are Consolidating at Lower Timeframes-Is it Good Time to Buy? – Coinpedia Fintech News
Exchange Outflows
Despite the recent Bitcoin spike, aggregate market data from Coinglass shows that the total balance on exchanges has declined. Gemini crypto exchange has recorded the highest outflows, with over 19k Bitcoins withdrawn in the past 30 days.
Altcoins Break Away from Bitcoin’s Shadow
Crypto market analysts forecast Bitcoin price will retrace to about $25k before continuing to $30k and beyond, with a market dominance of around 47.7 percent. Cash inflow to altcoins has been recorded in the past two weeks, with large-cap alts like XRP, ADA, and Dogecoin showing early signs of decoupling.
Source: https://coinpedia.org/bitcoin/bitcoin-price-analysis-brace-yourself-for-aprils-rollercoaster-ride-amid-liquidity-crisis/