Bitcoin’s aggregated 2% market depth has reached a one-year high of $623.40 million as of Nov. 16, marking a significant increase from $422 million on Nov. 5. This surge in liquidity indicates a growing market confidence, as deeper liquidity suggests that traders and institutions are more willing to participate in the market, providing a cushion against price volatility.
The increase in market depth leading up to and following the US presidential election is not an isolated event but part of a broader shift in macroeconomic and political conditions. The election of Donald Trump and his administration’s expressed support for Bitcoin and the crypto industry through concrete policies have sparked increased market activity.
This political alignment with the crypto space has likely reassured institutional and retail investors that the regulatory environment could become more favorable, reducing perceived risks and encouraging greater participation. The market reacted positively to the news, with traders interpreting it as a signal for broader adoption and institutional inflows. The rise in market depth along with the price surge indicates that market participants were responding to the election results and positioning for a sustained bullish trend.
The bid versus ask depth also reflects the impact of the election, with sell orders slightly outweighing buy orders. However, this imbalance did not trigger a significant price correction, indicating robust buyer demand even as Bitcoin surpassed $93,000.
The dominance of the US market in global market depth has played a crucial role in driving this liquidity surge. Despite a slight decrease post-election, the US consistently accounted for over 50% of global depth in 2024, highlighting the influence of American institutions and traders on market activity.
On a specific exchange level, Bitfinex emerged as the leader in global market depth, capturing a 27% share on Nov. 16. This coincided with Bitcoin’s post-election rally, suggesting that Bitfinex was successful in attracting a significant portion of the increased trading activity. In contrast, Binance experienced a decline in market share, potentially due to ongoing regulatory scrutiny, which may have deterred institutional players from using its platform despite market optimism.
In conclusion, the post-US election period has seen a surge in Bitcoin liquidity, driven by increased market confidence and a favorable regulatory outlook. This liquidity increase, combined with the dominance of the US market and the performance of specific exchanges, reflects a growing optimism and engagement in the crypto space.