Bitcoin’s market liquidity is tightening as the crypto continues to consolidate following a steep correction from its February peak of $97,000.
On-chain data from Glassnode shows that capital inflows have slowed significantly, with liquidity conditions deteriorating across both spot and futures markets.
Exchange inflows—a key measure of market activity—have dropped more than 54% from their cycle peak, reflecting lower investor participation, Glassnode wrote in a report on Tuesday.
At the same time, open interest in Bitcoin futures has declined by 35%, falling from $57 billion at the market’s all-time high to $37 billion, signaling a reduction in leverage and speculative activity.
The asset is down 23% from its January 20 all-time high near $109,000 and a further 15% over the last 30 days to $82,800, CoinGecko data shows.
A major factor contributing to the liquidity crunch appears to be an unwinding of the cash-and-carry trade—a strategy in which traders arbitrage Bitcoin’s price premium in CME futures relative to spot prices.
Another factor analysts point to is the shifting sentiment on macroeconomic developments abroad, a pivot from knee-jerk responses earlier in the month to President Donald Trump’s
