Market Liquidity Stretched Thin Amid Earnings Season Volatility

Market liquidity remains strained, according to Lin, Deribit’s Asia-Pacific Business Head, who shared insights on the X platform. He observed a 15%-20% decrease in liquidity compared to pre-‘10.11 crash levels.’ This trend is attributed to the volatile earnings season currently gripping U.S. equities. As stocks in the U.S. hit new highs despite this volatility, market activity remains limited due to capital absorption by the earnings season. While a potential surge in activity is expected towards the year’s end, Lin anticipates near-term volatility will remain high and significant movement in the short term is unlikely.