Data shows a clear decline in Bitcoin liquidity on the Binance platform, coinciding with relative weakness in price movement. Bitcoin is currently trading around $72,000, while the Liquidity Index has fallen to approximately 0.278, and the 30-day Turnover has dropped to around 348,800, marking one of its lowest levels.

From late January to mid-February, the Liquidity Index gradually rose from levels near 0.45 to a peak of approximately 0.65, while the 30-day Turnover climbed to nearly 850,000. This increase in liquidity was accompanied by more stable price movements, with Bitcoin trading above $80,000, reflecting a significant influx of liquidity and elevated trading activity during that period.

However, since late February, the Liquidity Index has begun to decline gradually, falling from levels above 0.60 to below 0.30 currently. This represents a significant drop, reflecting a noticeable decrease in market depth. Concurrently, the 30-day Turnover declined sharply from approximately 850,000 to around 348,000, indicating a substantial decrease in investor activity, particularly among whales and institutional participants.

These current values suggest that the market is experiencing a period of reduced liquidity and weaker trading activity, which may keep Bitcoin’s price movements volatile in the short term. However, any rebound in the Liquidity Index above 0.40 could signal a return of market momentum and an influx of new liquidity, potentially supporting stronger price movements in the near term.

Written by Arab Chain