The cryptocurrency market is currently facing substantial downward pressure, driven in part by liquidity issues impacting major market makers. Tom Lee, chairman of Ether treasury company BitMine, recently provided insights on the situation during an interview on CNBC, where he shed light on how the recent market crash on October 10, which led to record $20 billion in liquidation, has exacerbated these challenges. Lee explained that reduced capital reserves for market makers, combined with decreased trading revenue from investors, have created a difficult environment. To address this, market makers have been forced to reduce their balance sheets further to free up capital. Lee pointed out that if these markets are lacking funds, they must adjust by reducing their trading activities and selling assets if prices fall, potentially deepening the downward trend. He emphasized market maker’s crucial role in the cryptocurrency ecosystem, comparing them to central banks, warning of potential difficulties for several weeks until liquidity issues are resolved. 2023 has seen similar challenges in the stock market following a significant price drop which saw the price of Bitcoin fall from over $121,000 to $86,900 and mirroring patterns across the overall market. Lee suggests that this unwinding process may take another couple of weeks before the market recovers. Similar to the 2022 downturn when the process took eight weeks, he believes that cryptocurrencies like Bitcoin and Ethereum could serve as leading indicators for equities as they are being impacted by these liquidity challenges