Ethereum's Liquidity Thins Despite Strong Q3 Gains

Ethereum's native token, Ether (ETH), surged 70% in the third quarter, outpacing Bitcoin's (BTC) 42% gain. Despite this strong performance, ETH's order book depth has significantly thinned, raising concerns about liquidity. According to a CoinGecko report, ETH's median daily market depth between July 6 and September 30 was only 35% to 45% of Bitcoin's, a notable drop from at least 60% during the same period last year.

Market depth measures the total dollar value of buy and sell orders within a certain price range. A thinner market means large orders can cause greater price volatility. Within a 0.15% range of the mid-market price, ETH's depth stands at $13 million to $14 million. While this indicates tight liquidity, ETH remains relatively easy to trade, with depth on both the bid and ask sides maintained above $1 million across most exchanges.

The thinning liquidity is not unique to Ethereum. Solana's SOL token has also experienced a significant contraction in liquidity since 2025. SOL's depth within a 2% range of the mid-market price has dropped from around $28 million on each side of the order book last year to approximately $20 million this year. This reflects a reduced capacity to absorb large buy or sell orders without significant price impact.

XRP, another major cryptocurrency, maintains a stable total depth of around $30 million. However, its order book leans heavily toward buyers, with bid-side orders nearing $18 million and ask-side orders around $14 million. Despite XRP's market cap being roughly 40% higher than SOL's, its depth within a 2% range falls short of SOL's, attributed to SOL's higher daily trading volume.