Bitcoin’s Struggle to Reclaim $90,000: A Test of Market Stability
Bitcoin’s inability to reclaim $90,000 looks less like a debate about narrative and more like a test of market stability. For most of 2025, the surface story has been one of institutional dynamics, with the US moving closer to a workable regulatory framework, culminating in President Donald Trump’s signing of the GENIUS Act to federalize payment stablecoins.
At the same time, spot Bitcoin ETFs normalized exposure within brokerage channels, and the broader crypto economy traded as if it had finally entered the mainstream of the asset class. This led to a rally that pushed Bitcoin to a new all-time high of $126,223 in early October. However, by October 10, the microstructure deteriorated when a violent settlement wiped out about $20 billion in leveraged positions across all crypto venues.
This resulted in BTC’s price falling 30% from its 2025 highs and the asset recording its first red October in several years. Since then, the Bitcoin market has retreated into the recovery phase due to lower liquidity, lower trading volume, and selling by larger holders. This dynamic goes a long way toward explaining why Bitcoin is currently struggling below $90,000, rather than viewing this level as a starting point for new highs.
The Hangover of October 10th
The liquidation event was significant because it fundamentally changed the risk appetite of the marginal liquidity provider. In a deep market, volatility is painful but tradable. Market makers quote size near the median price, arbitrage desks ensure venues are aligned, and large flows remain clear without forcing price differentials.
After October 10, the incentives reversed. Traders tightened risk limits, and the market began trading with significantly reduced shock absorption. This brittleness is evident in the behavior of larger farmers. CryptoSlate previously reported that BTC whales continue to dump top cryptocurrencies, dampening market momentum even after leverage removal.
Furthermore, the market shift can also be seen in the Bitcoin volume and depth data. CoinDesk Data’s November exchange review shows that centralized exchange activity has fallen to its lowest level since June. According to the company, combined spot and derivatives volumes on centralized exchanges fell 24.7% month-over-month to $7.74 trillion, the largest monthly decline since April 2024.
Spot volume fell 21.1% to $2.13 trillion, while derivatives volume fell 26.0% to $5.61 trillion. Notably, derivatives market share fell to 72.5%, the lowest level since February 2025. A market can express high prices when sales are low, but the dynamics change immediately when participants have to change their size.
The Depth Has Sunk
The clearest warning sign for Bitcoin is its current market depth, which measures visible buying and selling interest near the median price. This is where the “trillion dollar illusion” becomes tangible. Market capitalization is simply a mark-to-market calculation; liquidity is the ability to translate an intention into execution without paying a hidden slippage tax.
When order books are large and spreads predictable, institutional strategies, planned rebalancing, and hedging without slippage shocks are feasible. Liquidity ties: dense flow leads to tighter bids from market makers, resulting in lower costs and greater participation. However, the opposite is self-fulfilling. Low liquidity drives up trading costs, forces participants to withdraw, and ensures that the next shock leaves a deeper scar.
Data from Kaiko shows that Bitcoin’s aggregate market depth of 2% has fallen by about 30% from its 2025 peak. In practice, this is the difference between a market that can accommodate a fund rebalancing without much issue and a market that will gape through levels when the same inflow occurs. A snapshot from Binance, the largest crypto exchange by trading volume, makes this clear.
According to Kaiko, the 0.1% and 1% market depths in BTC pairs have increased significantly in recent years, eclipsing the pre-2022 crash peaks. Since Bitcoin’s last record high in October 2025, Binance’s 1% market depth has been over $600 million. Since then, that depth has fallen to under $400 million at press time.
ETF Flows and the Migration of Off-Exchange Liquidity
The second structural shift is where liquidity is now, particularly as the ETF complex matures. Data from SosoValue shows that investors have withdrawn more than $5 billion from US-listed spot Bitcoin ETFs since October 10. In a deeper band, a demand shock of this magnitude is gradually absorbed. In a thinner market, a “push-pull” dynamic emerges where price stagnates at round numbers because each rally encounters a wall of redemptions, profit-taking, and whale payouts.
Meanwhile, regulatory changes in plumbing have further altered the way flows enter and exit the system. In July, the SEC voted to allow the creation and redemption of in-kind crypto ETP shares, a move aimed at bringing these products in line with commodity ETPs. Operationally, in-kind flexibility provides authorized participants (APs) with more options for sourcing and delivering Bitcoin, including through internal holdings, OTC counterparties, and prime broker channels.
While this reduces friction under normal conditions, it reinforces a broader trend: liquidity is increasingly internalized from visible exchange order books. This migration explains the current paradox: Bitcoin remains a huge, institutionally held asset, but feels mechanically fragile. Private liquidity is under no obligation to be on display during a panic. When stress occurs, spreads widen, sizes shrink, and activity returns to public venues precisely when public depth is at its weakest.
At press time, Bitcoin is ranked No. 1 by market capitalization, and the same goes for its price, with a high of 0.41% in the last 24 hours. Bitcoin has a market capitalization of $1.76 trillion with a 24-hour trading volume of $33.77 billion. The entire crypto market is valued at $2.99 trillion with a 24-hour volume of $91.59 billion. Bitcoin dominance is currently at 58.93%. Learn more about Bitcoin and the crypto market at https://cryptoslate.com/bitcoin-struggles-to-reclaim-90000-amid-plummeting-liquidity-and-waning-market-depth/
