The major cryptocurrencies, Bitcoin and altcoins, have experienced sharp declines, dropping to levels not seen in a long time.
With Ethereum falling below $3,000 after a long period of time, the analytics firm said ETH liquidity has dropped to all-time market lows and disappeared completely.
Ethereum liquidity has fallen to levels previously seen at major market bottoms, according to analysis by Altcoin Vector, an X-account specializing in Swiss Block altcoins.
The analyst firm said that Ethereum’s liquidity has dropped to virtually zero, which is very similar to what was seen during significant declines in the past.
Analysts say market bottoms have historically formed after a collapse in liquidity, followed by a correction lasting several weeks, rather than a structural decline.
“Following a liquidity collapse, there tends to be a few weeks of correction and a bottom rather than a structural decline.
“ETH seems to be entering such a correction and bottoming phase now. It’s only a matter of time.”
Analysts noted that price corrections and bottom formations typically continue until liquidity is restored, and said ETH prices are likely to recover once liquidity returns in the coming weeks.
“However, if Ethereum’s liquidity and price recovery is delayed, a prolonged sideways trend could continue and weaken ETH’s structural stability.”
*This is not investment advice.
