When October Surprise Meets Crypto Liquidity Drought

CEX

Derivatives

Liquidity

Written by Adam Morgan McCarthy

13/10/2025

BTC longs wiped out as market plunges
Liquidity dried up as market makers stepped back
The role of Binance and Ethena’s USDe in the crash

Trend of the week

Volumes spiked on Friday as panic swept through crypto markets, exposing a stark liquidity gap across BTC order books. As selling accelerated, there simply wasn’t enough resting depth to absorb the flow; order books on several exchanges thinned out to the point of appearing empty for several minutes across major BTC venues. This dislocation, driven by a retreat of active market makers, amplified price impact and volatility and set the tone for the session’s outsized move.

On several exchanges, there was almost nothing near the mid; only wider bands such as 4% and 10% from the mid-price showed meaningful bids, most visibly on Binance, Crypto.com, and Kraken.

It is highly likely that the volatility and uncertainty made market makers less comfortable taking trades during Friday’s crash, which was likely a contributing factor to the severity of the sell-off. Sign up below to read more!

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