The cryptocurrency market continues to evolve at a rapid pace, with increasing participation from traders, investors, and institutions. This weekly report provides a focused analysis of secondary market dynamics, particularly examining exchange liquidity through the lens of order book depth. While no investment advice is offered, the insights shared aim to support informed decision-making in crypto trading.
Market Overview
Our analysis centers on the top 100 cryptocurrencies ranked by market capitalization on CoinMarketCap. Industry classifications are primarily based on frameworks like those from MyToken, with minor adjustments to reflect emerging trends and ecosystem developments. As our understanding of the blockchain landscape deepens, these categories will be refined accordingly.
New Additions to the Top 100
- KNC (Kyber Network)
- NULS
Exits from the Top 100
- ETP (Metaverse ETP)
- POWR (Power Ledger)
Notably, POWR was the sole representative in the Energy sector. With its exit from the top 100, the Energy industry classification has been removed from this week’s sector-based analysis.
Performance of Top 100 Cryptocurrencies by Sector
Between February 20 and March 22, 2019, we evaluated the performance of major crypto sectors. The following insights highlight average daily returns and volatility across different industry groups.
Daily Returns vs. Volatility (Feb 20 – Mar 22, 2019)
Key sectors analyzed include:
- M (Market) – Overall crypto market average
- DC (Digital Cash) – Privacy-focused and payment-oriented tokens
- CP/MP (Computing Power / Mining Pools) – Infrastructure and mining-related projects
- A/M (Advertising & Media) – Decentralized content and ad platforms
- G/E (Gaming & Entertainment) – Blockchain gaming and digital collectibles
- C (Classic Mainstream) – Established players like BTC, ETH, XRP
- D/GT (Decentralized Governance & Tokens) – DAOs and governance models
- E/T (Exchange Platform Tokens) – Native exchange utility tokens
- OC/I (Off-chain & Cross-chain Solutions) – Interoperability and scaling protocols
👉 Discover how platform tokens are reshaping exchange ecosystems
While some sectors contain only one or two tokens—potentially skewing data—others comprise over a dozen assets, offering more statistically reliable trends. Notably, sectors such as Gaming & Entertainment and Advertising & Media showed higher-than-average volatility but lower correlation with broader market movements.
Correlation Between Sector Returns
Analyzing daily return correlations from December 21, 2018, to March 22, 2019, reveals important structural insights:
- High Correlation (close to +1): Most mainstream crypto sectors moved in tandem with overall market trends.
- Low Correlation (near 0): Social/Communication, Gaming/Entertainment, and Computing Power/Mining Pool sectors demonstrated weak linear relationships with the broader market.
- Stablecoins: As expected, exhibited near-zero correlation due to price anchoring mechanisms.
This decoupling suggests that certain niche sectors may offer diversification benefits for traders seeking uncorrelated exposure within their portfolios. Projects such as Pai, Enjin Coin (ENJ), and Maximine Coin exemplify this trend, showing independent price action driven by project-specific developments rather than macro-market sentiment.
Focus Topic: Order Book Depth (Part 1)
With Bitcoin, Ethereum, and other blockchain innovations dominating headlines, more users are entering the crypto space—opening accounts, depositing funds, and engaging in active trading. However, choosing the right exchange among 100+ platforms is far from straightforward.
For most traders, two factors stand out when evaluating exchanges:
✅ Security
✅ Liquidity
While many market data platforms rank exchanges based on reported trading volume and number of trading pairs, growing evidence suggests that volume metrics can be misleading. Numerous studies over the past year have highlighted widespread wash trading—artificially inflated volume generated through self-trading—particularly on centralized exchanges.
What Is Liquidity?
Liquidity refers to the ability to buy or sell an asset quickly without causing significant price impact. A highly liquid market features:
- Numerous active participants
- Tight bid-ask spreads
- Deep order books with substantial buy and sell orders near the current price
While trading volume indicates activity, it doesn't necessarily reflect true liquidity. Instead, order book depth serves as a more reliable proxy for market stability.
Measuring Order Book Depth
To assess liquidity across exchanges, we analyzed the ETH/USD or ETH/USDT trading pairs on several popular platforms. Using order book snapshots taken every two hours on March 9, 2019, we calculated how much ETH would be required to move the price down by 0.3%, 0.5%, and 1% from the best bid.
The results represent averages from 12 snapshots throughout the day.
Key Findings:
- Significant variation exists in order book depth across exchanges.
- Some platforms with high reported volumes showed shallow order books.
- Others with moderate volume demonstrated strong depth, indicating healthier liquidity.
For example:
- Exchanges with deep books could absorb large sell orders with minimal slippage.
- Platforms with thin books risked sharp price drops even after small trades.
👉 See how real-time order flow impacts trading performance
This disconnect between volume and depth raises important questions about data integrity and underscores the need for better transparency in exchange reporting.
Volume vs. Market Depth: A Critical Comparison
When comparing daily trading volume against order book depth, a clear pattern emerges: high volume does not guarantee high liquidity.
Some exchanges report massive volumes but lack sufficient open orders near the mid-price. This discrepancy may stem from:
- Large wash trades executed during snapshot periods
- High-frequency bot activity inflating turnover
- Temporary spikes not reflected in standing orders
Conversely, exchanges with consistent depth—even at lower volumes—offer more predictable execution and reduced slippage risk.
It’s important to note: we are not accusing any specific platform of manipulation. Legitimate large trades can temporarily boost volume without appearing in order books if they execute instantly against existing orders. Our goal is simply to provide traders with more robust tools for evaluating exchange quality.
Future reports will explore how order book depth fluctuates across different times of day and market cycles. By analyzing intraday patterns, we aim to determine whether liquidity remains stable or varies significantly under different conditions.
Frequently Asked Questions (FAQ)
Q: Why is order book depth more important than trading volume?
A: Trading volume reflects historical activity but doesn’t show available liquidity. Order book depth reveals how much can be traded immediately without moving the price—critical for large or time-sensitive orders.
Q: Can wash trading affect my trades even if I'm unaware of it?
A: Yes. Inflated volume can create a false impression of liquidity, leading traders to choose less reliable exchanges. This increases slippage risk and potential losses during volatile periods.
Q: Which sectors showed the lowest correlation with the overall crypto market?
A: Gaming & Entertainment, Social/Communication, and Computing Power/Mining Pool sectors had weak correlations, suggesting potential diversification opportunities.
Q: How often should traders check order book depth before placing trades?
A: Ideally in real time. Order books change rapidly. Using live data tools helps ensure accurate assessments of current liquidity conditions.
Q: Are platform tokens becoming more influential in exchange liquidity?
A: Yes. Exchange-branded tokens like BNB or OKB often incentivize trading activity through fee discounts, which can boost genuine volume and participation over time.
Q: Will future reports include more time-series analysis of liquidity?
A: Absolutely. Upcoming editions will examine how order book depth evolves across weeks and market phases to identify consistency and reliability patterns.
👉 Explore advanced trading tools powered by real liquidity data
As the crypto market matures, reliance on superficial metrics like raw trading volume must give way to deeper analytical frameworks. Order book depth offers a transparent, actionable measure of true exchange liquidity—one that empowers traders to make smarter platform choices. Stay tuned for next week’s report, where we’ll dive into intraday liquidity trends and their implications for active traders.