The amount of liquidity for crypto’s leading assets has declined to the lowest level since Terra’s collapse.

A chart shared by crypto data provider Kaiko on Wednesday paints a somewhat concerning picture for traders.

“[T]his is not great… could improve with more institutional funds entering the market, but the poor liquidity could keep them from doing so… for now, anyway,” tweeted Crypto is Macro Now newsletter author Noelle Acheson.

Market depth for both Bitcoin and Ethereum has fallen to lower levels than it did in the aftermath of FTX’s implosion in November. The indicator, which measures the quality of an orderbook on exchanges, signals the prevailing liquidity conditions of a particular asset.

In a recent research report, Kaiko analysts found that the market depth for Bitcoin, aggregated across 15 centralized exchanges fell to just 6,800 BTC from ahead of 15,000 BTC in October. This corresponded to a significant drop in liquidity, even on bigger exchanges like Coinbase and Binance, where BTC liquidity fell by more than 43%.

Meanwhile, Etheruem’s market depth fell from 139,000 ETH to around 57,000 ETH over the same period. 

“The decrease was mainly driven by Binance where ETH market depth fell by 63%, compared to a 38% drop on Coinbase,” noted Kaiko analyst Conor Ryder.

According to data from, implied volatility for both Bitcoin and Ethereum also saw a significant rise over this period.

Although crypto markets appear to be more volatile for the time being, thinning liquidity isn’t necessarily a bad thing. If traders place higher bids, a move up could come quicker than expected.

Larger spreads might even become the norm for crypto as some of the largest market makers in the space, including Alameda Research, have closed shop.