Bitcoin (BTC) market liquidity has dropped to a 10-month low, partly due to the bank run in the US and ongoing regulatory actions on crypto companies. This has led to increased price volatility and higher fees for traders on US exchanges, with slippage for the BTC-USD pair on Coinbase climbing by 2.5 times at the beginning of March. Stablecoins are replacing USD pairs, but this has an adverse effect on liquidity in the US and will indirectly harm investors there, according to Conor Ryder, research head of on-chain data analytic firm Kaiko. Despite a bullish quarter in terms of price gain, BTC liquidity has dropped to 10-month lows as market makers lose access to USD payment rails.

(By PRASHANT JHA)