BloFin warns of low crypto market liquidity amid macroeconomic shifts

BloFin, a crypto exchange, has issued a warning about the low liquidity in the crypto market and its potential impact on Bitcoin’s price. According to a research note shared with CryptoSlate on July 3, BloFin predicted that the market’s liquidity level will remain low as investors increasingly opt for risk-free assets. This shift in investor preference is attributed to the Federal Reserve withdrawing liquidity from the market and the rise in demand for safe-haven assets like gold, silver, and the Dollar Index (DXY). As a result, high-risk assets like Bitcoin are experiencing low liquidity, which has negatively affected their price movements. BloFin highlighted that Bitcoin faces high downside risk, particularly if there is an unexpected event. The platform also mentioned that market makers’ impact on price stability was weakening, and Bitcoin lacked significant support levels below the $63,000 mark. Despite a slight increase in the butterfly index, BloFin analysts advised investors to exercise caution due to potential systemic market risks.