The Bitcoin and crypto markets have outperformed the global equities market in the first quarter of 2023, according to market data from TradingView. Bitcoin has gained approximately 70 percent in value during Q1, reclaiming its market capitalization of half a trillion following heavy liquidations last year. However, Bitcoin price has traded around $27.7k during the early Asian market, down 2.5 percent in the last 24 hours.

Liquidity is a crucial factor in the crypto market, as it is a top barometer for the state of crypto health to most analysts. Moreover, the altcoin market has a significant correlation with Bitcoin’s liquidity. With governments and institutional investors tapping into the crypto market, liquidity has become even more critical.

Regulatory Scrutiny and Liquidity Challenges

The ongoing cryptocurrency regulatory scrutiny in the United States has significantly affected the overall crypto liquidity in the industry. Furthermore, USD off and on ramps have significantly been phased out as stablecoin pairs become more popular.