Despite the remarkable Bitcoin recovery to $75K and resilience during the West Asia crisis, its mid-term outlook was still uncertain.
According to crypto options analytics firm Amberdata, the current rebound was sitting on a structurally weaker liquidity compared to pre-October levels.
As such, the market was fragile and prone to outsized moves (liquidation cascades), especially downward if selling pressure reappears.
Bitcoin’s downside risk lurks
The firm cited order book liquidity, which tracks market maker orders or the ability to execute trades without massive slippages or moving the price.
When orderbook liquidity is thin (market makers become cautious), even small orders can move the price alot. But thick liquidity helps absorb the flows effortlessly.
Per the attached chart, BTC’s rally from May to October 2025 saw liquidity rise from $21M to a peak of $45M (thick liquidity).
During the October crash, liquidity dropped 46% within hours, from $48M to $26M, as market makers withdrew during the liquidation cascade. This further intensified the sharp plunge from $122K to below $100K.
Now, the recent recovery has seen orderbook liquidity climb above $30M.
According to Amberdata, a sustained BTC price recovery would require a liquidity reading of $35M or above $40M to underscore renewed market maker confidence and pre-October crash conditions.
Otherwise, the firm warned,
Watch for depth declining while price remains stable – this divergence preceded October’s collapse. Depth below $25M (10bps) combined with rising volume would signal elevated cascade risk.
The firm added that liquidity has seen gradual improvement, but “full recovery is unlikely in the near term.”
Put differently, market makers amplify price moves and any selling pressure if liquidity slips below $25M would likely accelerate a liquidation spree and downside risk.
What’s next for BTC?
Separately, there was a rise in Bitcoin inflows to exchanges. In fact, CryptoQuant’s Head of Research, Julio Moreno, cautions that $75K or $85K could become a key resistance.
Besides, as the April tax season approaches, the typical broader net dollar liquidity drain could derail the recovery.
In the near term, though, Bitfinex analysts told AMBCrypto that a sustained rally would be possible only if BTC flips $75K into support.
If BTC continues to hold above the $75,000 to $78,000 acceptance zone while other risk assets lag, that signals strong spot-driven demand and supply absorption, which is typically the precursor to a sustained breakout.
Overall, the recent recovery has attracted more leveraged bulls. But the thin orderbook liquidity still showcases that the market was not out of the woods just yet.
Final Summary
- Orderbook liquidity was still below pre-October crash levels, with Amberdata urging BTC traders to remain cautious.
- CryptoQuant also projected a possible BTC rally cool-off at $75K or $85K in the near term.
