Kaiko: Market exhibited instability prior to last week
Kaiko, a leading provider of cryptocurrency market data, analytics, indices, and research reports, believes that the anticipation of a Bitcoin ETF is causing even more volatility in the market.
According to a report released on January 8th, both Bitcoin (BTC) and the broader market experienced a sudden downturn in the first week of January. Analysts attribute this retreat to speculation surrounding the potential denial of a spot ETF. However, the report preceding the market decline indicated signs of instability.
One often overlooked metric, price slippage, has been used to provide insight into this situation. Price slippage measures the difference between the expected price at the time of a market order and the actual execution price. Kaiko’s analysis shows the average slippage for a hypothetical $10,000 market order on major platforms like Binance, Coinbase, and Kraken.
In the days leading up to the market downturn, slippage showed normal fluctuations. However, on January 2nd, it exceeded 0.02% and remained at that level for over a day. This suggests a decline in liquidity even as prices stayed around $45,000.
The approaching deadline of January 10th marks the SEC’s final day to make a decision regarding ARK 21Shares’ spot ETF. Regardless of the outcome, Kaiko predicts that the market will likely experience increased volatility.
Read more: Kaiko suggests that the beginning of altcoin season may be approaching. Follow us on Google News.
