ExchangeDEX+

Buy Crypto Markets Spot Futures500X Earn Events

Tom Lee attributes crypto downturn to market maker withdrawals causing liquidity shortages in Ethereum and altcoins.Tom Lee attributes crypto downturn to market maker withdrawals causing liquidity shortages in Ethereum and altcoins.

Tom Lee Identifies Market Makers Behind Crypto Liquidity Crunch

Author: bitcoininfonews

Source: bitcoininfonews

2025/11/21 09:28

TOM$0.000325-12.39%

LEE$0.649-0.15%

What to Know:

Tom Lee’s insight links market downturn to market maker liquidity issues.
Market players are adjusting strategies amid tight liquidity.
Affected cryptocurrencies include ETH, BTC, and large-cap altcoins.

Tom Lee, Fundstrat’s Research Head, links the severe crypto downturn to retreats of key market makers, triggering liquidity issues and impacting Ethereum and other major altcoins.

This event highlights the complex interplay between market maker actions and liquidity, underscoring potential volatility in Ethereum and urging strategic shifts amid institutional and developer engagements.

Tom Lee, Fundstrat’s Head of Research, cites market maker withdrawals as the cause of recent crypto liquidity issues.

The event affects crypto liquidity, challenging market stability, with Ethereum and altcoins seeing significant impacts.

Market Maker Withdrawals Tighten Crypto Liquidity

Tom Lee, noted for accurate predictions, attributed the crypto slump to market maker withdrawals. He suggests this crypto quantitative tightening is limiting liquidity, affecting major coins. Lee’s commentary on the ongoing “quantitative tightening”—a withdrawal of liquidity by market makers to consolidate their balance sheets—presents another layer of complexity. This scenario is currently damping Ethereum’s price. The event saw market makers pulling back due to financial strains, leading to reduced liquidity particularly in Ethereum and other large-cap cryptocurrencies.

Volatility Spikes as Trading Volumes Decline

Immediate effects include reduced trading volumes and increased volatility across major digital assets. Ethereum’s on-chain metrics show noticeable shifts. Financial implications include potential hindrances to market recovery, emphasizing the need for strategic liquidity planning by investors and firms.

2020 Liquidity Crisis Offers Recovery Insights

Comparable events like the 2020 COVID crash displayed similar liquidity vacuum phenomena, triggered by major market player withdrawals. Analysts observe potential for future recovery cycles as interest in crypto collateralization among institutions continues to rise. Tom Lee, Head of Research, Fundstrat — “You’re going to see a crypto rally into the end of the year. It really does help to see JPMorgan say they’re open to using crypto as collateral. That’s a pretty bullish signal.”

Disclaimer: The information on this website is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are volatile, and investing involves risk. Always do your own research and consult a financial advisor.

Market Opportunity

TOMCoin Price(TOM)

$0.000326

$0.000326$0.000326

-19.30%

USD

TOMCoin (TOM) Live Price Chart

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact [email protected] for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.