Umair
March has so far been an extremely volatile month for Bitcoin, with the past 13 days recording sharp price swings ranging between $95,000 and $78,000. However, despite these fluctuations, liquidity played a key role in stabilizing the market, particularly by minimizing the duration of price dips below $80,000.
Market depth, a critical liquidity metric, measures the cumulative volume of buy and sell orders within a defined price range. Aggregated 2% market depth reflects the total value of orders within 2% of the mid-market price across major exchanges, expressed in US dollars and BTC. This metric provides insight into how well the market can absorb large orders without significant price disruption. Deep market depth signals strong liquidity and often reduces volatility by ensuring sufficient buy and sell orders near the market price.
Since the beginning of the month, Bitcoin’s 2% market depth has remained substantial despite heavy selling pressure. Data shows that aggregated 2% market depth ranged between $456 million and $468 million throughout the month.
In BTC terms, this ranged from 514,000 BTC to 569,000 BTC. This liquidity ensured that despite sharp price declines, there was significant buyer interest to absorb sell-side pressure.
Bitcoin’s price volatility intensified between March 9 and March 11, when BTC briefly dipped below $80,000.On March 9, Bitcoin dropped to $80,114 before recovering to $80,810 by the day’s end.
On March 10, it fell further to $77,522 before closing at $78,666. The following day, Bitcoin reached $76,714 intraday but rebounded strongly to $82,992. These dips were followed by a surge in trading volume exceeding 60,000 BTC daily, indicating strong market participation.
During this period, the balance between bid and ask orders within the 2% depth played a crucial role. In early March, ask-side liquidity outweighed bid-side liquidity, consistent with profit-taking behavior. However, the order book shifted as Bitcoin’s price approached $80,000.
Bid liquidity increased substantially, indicating accumulating demand at these lower levels. On March 10, bid volume within the 2% depth reached 298,000 BTC, surpassing ask-side liquidity at 271,000 BTC. This increased bid-side volume helped absorb aggressive selling, preventing a prolonged decline below $80,000.
Large bid clusters near $80,000 and $83,000 were key factors in stabilizing Bitcoin’s price. These large buy orders were triggered as BTC fell, limiting further downside. A significant bid wall near $83,000 played a key role in halting the initial March 9 decline, with similar buyer interest emerging as the price tested lower levels on March 10 and March 11.
Bitcoin’s 2% market depth this month was considerably higher than in previous volatility cycles, particularly in 2023 and 2024. While depth temporarily decreased during the fastest price declines — a common occurrence when market makers pull orders during volatility — the recovery in depth occurred quickly. By March 12, aggregated 2% market depth had rebounded to $467.95 million, reinforcing that liquidity providers remained active despite turbulent conditions.
The efficiency with which Bitcoin rebounded from sub-$80,000 levels reflects the strength of market liquidity. While Bitcoin dipped below $80,000 on three occasions, it never remained there for more than a few hours. Bid liquidity increased rapidly each time, absorbing supply and driving BTC back into the $80,000 to $82,000 range.
Strong bid-side liquidity, coupled with total depth levels exceeding $450 million throughout the month, ensured that BTC’s price volatility remained contained. Bitcoin’s dips below $80,000 could have resulted in extended price weakness and deeper declines without this depth.
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