March has so far been a very unstable month for Bitcoin, with sharp price movements ranging from $95,000 to $78,000 over the last 13 days. However, despite these fluctuations, liquidity played a key role in stabilizing the market, particularly by minimizing the period of price dips below $80,000.
A key liquidity metric, Market Depth, measures the cumulative amount of buy and sell orders within a defined price range. The aggregated 2% market depth reflects the total amount of orders within 2% of the mid-market price across major exchanges expressed in US dollars and BTC. This metric provides insight into how much the market can absorb large orders without major price disruptions. Deep market depths show strong liquidity and often reduce volatility by ensuring adequate buy and sales orders near market prices.
Since the beginning of the month, the 2% market depth for Bitcoin has remained quite substantial despite high sales pressure. Data shows that the aggregated 2% market depth ranged from $456 million to $468 million throughout the month.
In BTC terminology, this ranged from 514,000 to 569,000 BTC. This liquidity ensured that despite the sudden drop in prices, there was a greater interest in buyers to absorb seller pressure.
Bitcoin price volatility was strengthened between March 9th and March 11th. When BTC fell shortly below $80,000, Bitcoin fell to $80,114 on March 9th, then recovered to $80,810.
On March 10th, it closed at $78,666 after falling to another $77,522. The next day, Bitcoin hit $76,714, but it rebounded strongly against $82,992. Following these dips, trading volumes above 60,000 BTC daily have skyrocketed, indicating a strong market.
During this period, the balance between bids and orders within 2% depth played a key role. In early March, Ask-Side’s liquidity outperformed the liquidity of the bids, consistent with profit-making actions. However, as Bitcoin prices approached $80,000, the order book shifted.
Bid liquidity has increased significantly, indicating the accumulation of demand at these lower levels. On March 10th, bids within a 2% depth reached 298,000 BTC, exceeding the interrogational fluidity at 271,000 BTC. This increased volume on the bid side helped to absorb offensive sales, preventing the long-term decline to under $80,000.
The large bid clusters of $80,000 and $83,000 were key factors in stabilizing the price of Bitcoin. These large purchase orders were triggered when BTC fell and were further restricted to the downside. The near $83,000 bid wall played a key role in stopping the initial decline on March 9th, and similar buyer benefits were revealed as they tested low prices on March 10th and March 11th.
The 2% market depth for Bitcoin this month was significantly higher than the previous volatility cycle, particularly in 2023 and 2024. Meanwhile, depths temporarily decreased during the fastest price drops – a common occurrence when market makers withdraw orders during volatility – a rapid rebound of depth occurred. By March 12, the aggregated 2% market depth had rebounded to $467.95 million, enhancing the liquidity providers remained active despite the turbulent conditions.
The efficiency that Bitcoin rebounds from the $80,000 level reflects the strength of the market’s liquidity. Bitcoin went below $80,000 in three occasions, but didn’t stay there for more than a few hours. Bid liquidity increased rapidly every time, absorbing supply and reverting BTC to the $80,000-$82,000 range.
The liquidity of the strong bid side, coupled with total depth levels above $450 million throughout the month, ensured that volatility in BTC prices was curtailed. Bitcoin dip could have been below $80,000, and without this depth it could have resulted in a longer price drop and a deeper decline.
Deep liquidity cushions Bitcoin prices during March volatility, first appeared on Cryptoslate.
