Liquidity is represented by market depth, which measures the market's ability to absorb large trade orders without affecting prices. It often depends on several factors, including the time of day, market events at the time, and specific price levels.
Market bottoms are characterized by traders finding it difficult to make decisive moves, resulting in fewer buy and sell orders and lower liquidity.
“By analyzing the aggregate spot order book, specifically the order book with a spot order book depth of 0%-1% and 1%-5%, we found that low order book liquidity often coincides with market bottoms,” Shubh Verma, co-founder and CEO of Hyblock Capital, told CoinDesk. “These low order book levels can be an early indicator of price reversals, often preceding bullish moves.”



