Ethereum's Rally Hides a Thin Liquidity Problem
Ethereum's native token, Ether, posted a significant gain in the third quarter of 2026, outperforming Bitcoin with a nearly 70% rise. However, a closer look at the data reveals that the liquidity underlying this rally has thinned out, with Ether's order books showing only 35% to 45% of Bitcoin's equivalent level. This is a stark contrast to the same period last year, when Ether's order books were at least 60% of Bitcoin's.
The analysis by CoinGecko, cited by CoinDesk, measured median daily market depth within a specific price range. The data shows that Ether's depth averaged around $13 to $14 million across major exchanges, significantly lower than Bitcoin's equivalent level. This reduced liquidity can lead to higher slippage, making it more challenging to execute large trades without affecting the market price.
Experts point to returning inflows into US spot ETH ETFs as a likely driver of the rally, with net inflows reaching approximately $3.1 billion. However, this influx of capital may not necessarily translate to increased depth in the exchange order books. The trend of thinning liquidity is not unique to Ether, as Solana has shown a similar decline, while XRP's total depth has remained steady.