Crypto markets are still unsteady after the recent sharp sell-off, but analysts say the more notable growth in liquidity and performance across venues and assets has been a patchwork of factors rather than a decisive directional reset.
According to Block’s price page, bitcoin is down 17 percent in the past week alone, trading near the same level as the night of President Donald Trump’s election victory.
Much of the crypto market has mimicked BTC’s rout, with majors like Ethereum (ETH), Solana (Sol) and BNB all losing double-digit percentages over the past week.
Island Liquidity
Analysts of the quantitative yield protocol axis have flagged the emergence of “liquidity islands”, referring to pockets where capital is unevenly distributed as risk appetite across exchanges and protocols.
“Funding rates are turning negative at some points while increasing at others due to liquidity crunches,” said Ashwin Khosa, Chief Strategy Officer, Axis.
Onchin data also points to a split in positioning.
Nikolay Søndergaard, a research analyst at Nissen, said derivatives markets have shown a net long bias on platforms such as Hyperworthy, while other participants have shifted to stablecoins or gold exposures such as PaxG. Sondergaard notes that exchange costs may indicate less desire for selective accumulation and selling, even if the overall penalty is limited.
Capitalization
Diversification also appeared in product flow and asset performance.
Analysts at Bitfinex said that while Bitcoin and Ethereum exchange-traded products faced heavy redemptions late last month, Solana- and XRP-linked products attracted inflows, pointing to the strategy.
According to Bitfinex, HyperLiquid’s hype token soared as much as 44 percent as markets sold off, standing as a rare gainer amid broader weakness. Data.
Moreover, cross-asset signals have reinforced the dislocation theme.
Kraken’s Global Economist Thomas Parfomo said that gold has exhibited significantly less volatility than Bitcoin. He argued that this setup is more consistent with a short-term blow-up than a sustainable shift in the safe-haven narrative.
While liquidity islands form and perform spectacularly, some experts suggest a clear move for Bitcoin and the broader crypto market is on the horizon.
Tony Severino, a market analyst at U Hudler, pointed to the historically tight Bollinger Bands on Bitcoin’s monthly chart, an indication of extreme volatility compression that often precedes a decisive move after a volatility spread.
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