CEXs’ Liquidity Drying up

The bid/offer spread is the difference between an asset’s bid price and ask price. This spread can be used as a measure of liquidity.

  • A small spread indicates higher liquidity as there are more market participants.
  • A larger spread indicates smaller liquidity and lesser market participants.

As the market turmoil continues due to potential insolvencies and liquidations, this has caused bid/offer spreads to WIDEN across multiple exchanges as market participants become hesitant to buy/sell — reducing the assets’ liquidity.

The bid/offer spreads for BTC and ETH are widening to new highs.

This will likely continue until market sentiment improves and market participants re-enter.

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