Bitcoin’s market liquidity has declined significantly since late 2025, with orderbook depth falling by 50%. Data indicates current market fragility stems more from 2026 trends than the major flash crash six months ago, which wiped out $19 billion in leveraged positions. While derivatives volumes have dropped, institutional ETF activity initially surged before also declining in early 2026.
Bitcoin and crypto markets sustained a massive hit on Oct. 10, 2025, a flash crash that wiped out a record $19 billion in leveraged positions. Many traders speculated that multiple market makers had been wiped out, while others accused the Binance exchange of manipulation.
Bitcoin’s aggregate orderbook depth typically ranged between $180 million and $260 million in September 2025. It stabilized near $150 million after the crash but now seldom exceeds $130 million, marking a 50% decline from September levels.
Market conditions deteriorated further in February 2026, with orderbook depth plunging below $60 million for nearly 10 days. Cryptocurrency derivatives volumes have also fallen short of the $200 billion mark commonly seen in September 2025.
The demand for bullish leverage remains weak, as shown by the Bitcoin perpetual futures funding rate. Data indicates stable conditions after the crash, followed by a sharp decline in February 2026.
Curiously, volumes of US-listed spot Bitcoin exchange-traded funds were not initially impacted by the flash crash. Activity in those instruments jumped to a 20-month high of $11.5 billion per day by late November 2025.
Bitcoin ETF volumes regularly traded above $4 billion per day between January and March 2026 but fell below $3.3 billion by early April. Similarly, US-listed Ether ETF average daily volume dropped to $1 billion, down from $2 billion in September 2025.
Multiple metrics point to a much less healthy cryptocurrency market in April 2026 relative to six months prior. However, the market structure held relatively firm through February 2026, suggesting the relevance of the October 2025 flash crash is less than previously imagined.
