Risk Appetite for Altcoins Low As Liquidity Dries Up, According to Analytics Firm Glassnode
Crypto analytics firm Glassnode has revealed that liquidity in the altcoin market is decreasing as investors become less interested in risk-on assets. The firm’s analysis indicates that key altcoin metrics are currently at cycle lows, indicating market weakness.
Glassnode highlights the drying up of liquidity across digital assets, including network settlement, exchange interaction, and capital flows. This underscores the current lack of interest in the market. However, long-term holders remain steadfast as their supply continues to reach all-time highs, while HODLer growth remains strong.
Furthermore, Glassnode points out that Bitcoin’s “Hot Supply” metric, which measures coins transacted within the last week, suggests that BTC market liquidity is reaching lows not seen since previous bear markets.
Overall, these findings suggest a lack of liquidity in both altcoins and Bitcoin, which may contribute to the current market conditions.
Hot Take: Lack of Liquidity Raises Concerns for Altcoins and Bitcoin
According to crypto analytics firm Glassnode, the altcoin market is experiencing a decline in liquidity due to a decreased appetite for risk-on assets. Key altcoin metrics are at cycle lows, indicating market weakness. Additionally, Bitcoin’s “Hot Supply” metric shows that BTC liquidity is reaching levels last seen during previous bear markets.
The lack of liquidity in both altcoins and Bitcoin raises concerns about market conditions and investor sentiment. With declining liquidity and a risk-averse environment, it remains uncertain when a risk-on regime will come into play. These findings highlight the importance of monitoring liquidity levels as they can significantly impact digital asset valuations and trading activity.
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