Would You like a feature Interview?
All Interviews are 100% FREE of Charge
February is over, but the “Alameda Gap” isn’t over.
As the two months of this year come to an end, cryptocurrency market prices have recovered somewhat from last year’s crash.Still, the so-called “Alameda Gap” has not been closed and liquidity remains far from the levels seen before the infamous crash. FTX Collapse.
Researcher Kaiko murmured The gap continues this month, with Bitcoin (BTC) “market depth still well below November levels.” that is,
“BTC-USD(T) bid and ask volumes were within 2% of the median price aggregated across 16 exchanges, hovering around 8k BTC in February, down 40% from October. ”
As a reminder, FTX Exchange and its parent company Alameda Research And many of its subsidiaries filed for bankruptcy last November — and those companies, along with founder Sam Bankman-Fried, have since dealt with regulatory and legal issues (at the expense of users).
travel I got it In the very same month, it pointed to the existence of the “Alameda Gap,” arguing that liquidity plunges typically occur during periods of volatility when market makers rush to manage risk.
“Cryptocurrency liquidity is dominated by a handful of trading houses, including: winter mute, amber group, B2C2, Genesis, Cumberland and (now deceased) Alameda. With the loss of one of the largest market makers, liquidity is expected to drop significantly, dubbed the “Alameda Gap.”
Riyad Carey, a research analyst at the firm, said: quoted According to Bloomberg on Friday,
“They were one of the biggest, but Alameda isn’t the only one. Other market makers have been hit and more cautious. […] Depending on the token, I would say there is still a 20-40% gap from previous liquidity levels. When liquidity is low, prices tend to be more volatile in both directions, and this has been the case in the last few months. “
Strahinja Savic, Head of Data and Analytics, said: FRNT Financialwas quoted as saying three arrow headsl (3AC), Celsius network, “and many other crypto funds, famous or not,” are responsible for this gap. Therefore, a decline in trading volumes at the end of 2022 could lead to the “demise” of these companies.
“These firms would have clamped down on spreads to keep them at bay and support the depth of the market,” but the drop resulted in “increased certain inefficiencies in the cryptocurrency market.”
“It was also a result of the Genesis bankruptcy, resulting in losses for other market makers associated with both Genesis and FTX,” claimed Vetle Lunde, senior analyst. K33 research (formerly Arcane Research).
trader is not back yet
Overall, according to Noelle Acheson, author of the newsletter “Crypto Is Macro Now,” the weak liquidity suggests that large traders are not returning to the market.
Acheson was quoted by Bloomberg as saying:
“With volatility continuing to rise since the beginning of the year, we expect some of the big players to gradually return to the market.Time.”
On the other hand, in the Weekly Market Overview, Kaiko, said Its daily trading volume has been consistently high this year. By the end of 2022, it had fallen to a year-to-date low, partly due to deteriorating retail sentiment after the FTX demise.
That said, sentiment appears to have picked up “significantly” so far in 2023, with daily BTC trading volume surpassing $14 billion in February.
The researcher added:
“The overall level of trading volume is also higher than at the end of 2022, with daily volume appearing to be pegged at $10 billion, as opposed to closing out about half of that last year.”
Silkworm also noted that the market depth of BTC and ETH has reached its lowest point since May 2022.
BTC 2% market depth aggregated across 15 centralized exchanges has nearly tripled from its October high to 6,800 BTC, he added. ETH market depth has decreased to around 57,000 ETH compared to 139,000 ETH in October.
In terms of price, BTC fell to $15,700 in November before rising to its current $23,283. As of 10:00 UTC Tuesday morning, it was down 0.5% for the day and 6% over the past week.
At the same time, ETC is trading at $1,621, down 1% over the past 24 hours and 4.7% over the past 7 days. This is a significant rise since he plummeted to $1,095 in November 2022.
____
learn more:
– FTX founder Sam Bankman-Fried faces more criminal charges – latest twist in high-profile case
– Report claims for Binance mixed user funds similar to FTX
– FTX Japan Crypto Exchange Resumes Withdrawals Today – What’s Happening
– $200M Galois Crypto Hedge Fund Closed As Half Of Its Assets Stuck On FTX Exchanges – Here’s What Happened