Since the launch of Ethereum (ETH) spot exchange-traded funds (ETFs), market liquidity for ETH trading pairs on U.S. centralized exchanges has significantly declined. Data shows that the average 5% market depth of ETH trading pairs has decreased by 20%, down to approximately $14 million. This indicates increased volatility in the current spot prices and heightened market sensitivity to large orders. The situation on offshore centralized exchanges is similar, with the 5% market depth of ETH trading pairs dropping by 19%, to about $10 million. This suggests that, whether in the U.S. or offshore markets, ETH spot liquidity is gradually diminishing, making spot prices more susceptible to 5% fluctuations due to sizable buy or sell orders.

CCData analyst Jacob Joseph pointed out that although the liquidity level of ETH trading pairs on centralized exchanges remains relatively high compared to the beginning of the year, it has declined by nearly 45% since reaching its peak in June. This means that the market depth and capacity to absorb large trades have significantly weakened compared to a few months ago. Joseph believes this change may be related to the overall poor market environment and seasonal effects of summer. Summer is often a period of relatively low trading activity, with fewer market participants and declining trading volumes, leading to a downward trend in overall market liquidity.

This reduction in liquidity means that large orders in the market are more likely to have a noticeable impact on prices. As market depth decreases, slightly larger buy or sell orders can cause rapid price fluctuations, increasing market volatility. This phenomenon not only affects short-term market performance but may also have a greater impact on investors' trading strategies. Investors executing large orders need to be more cautious, as existing liquidity may be insufficient to support smooth price movements. This situation highlights the market's vulnerability during periods of low liquidity and the potential impact of large trades on market prices.