The Truth Behind the "Mirage": Bitcoin Surge Hides Liquidity Crisis

Since the beginning of 2026, the cryptocurrency market has performed remarkably well, but behind the dazzling appearance lurks significant risk signals that cannot be ignored. The so-called “mirage” is merely an illusory scene reflected in the desert; the current market prosperity may be just the same—seemingly thriving, but actually illusory. According to the latest monitoring data from on-chain analytics firm Glassnode, although Bitcoin continues to rise, the spot market trading volume has fallen to its lowest point in nearly two years. This phenomenon signals much more than the price increase itself and warrants caution.

Trading volume hits a 2-year low, “rising price with shrinking volume” diverges from traditional bull market logic

In a healthy bull market, rising prices are usually accompanied by increasing trading volume. However, the current market exhibits a typical “rising price with shrinking volume” divergence. Glassnode data shows that the total spot trading volume of Bitcoin and competing coins has fallen to a new low since November 2023, while Bitcoin’s price has continued to climb during the same period.

It is important to clarify that “spot trading volume” measures the buying and selling activity of real funds within exchanges and is a core indicator of market enthusiasm. In a normal upward trend, new capital should continuously flow in to absorb profits from retail and institutional investors. However, the current situation is the opposite—funds needed to push prices higher are shrinking, which means that even slight selling pressure could trigger a sharp price correction. As of January 22, 2026, Bitcoin’s price is approximately $898,900, and despite fluctuations since the beginning of the year, the weak trading volume indicates a lack of genuine upward support.

Deteriorating liquidity structure, order book depth still not recovered

The root cause of market liquidity depletion can be traced back to the market upheaval in October 2025. During that event, within just a few hours, about $19 billion in highly leveraged positions were forcibly liquidated. This massive liquidation not only cleared out overly speculative participants but also profoundly changed the microstructure of the market.

Since then, market makers and liquidity providers have chosen to withdraw, leading to order book depths on exchanges remaining below pre-crash levels. Order book depth reflects the market’s capacity to absorb large transactions—shallower depth means prices are more easily impacted by large orders, resulting in more volatile price swings. In other words, even a relatively small sell order now could cause more severe slippage than before, which explains why the market reacts overly sensitively to any negative news.

An invisible crisis: the dance on thinning ice under liquidity exhaustion

If we compare the current market situation to dancing on ice, then liquidity is the ice beneath our feet. As trading volume continues to shrink and order book depth further thins, this ice is becoming increasingly fragile. The “mirage”-like rally is built on such a fragile foundation, and any unexpected event could cause investors to slip.

Experienced traders have already sensed the danger. When market participation declines and buying momentum weakens, the sustainability of price increases becomes questionable. The current prosperity may just be an illusion of a thriving scene, not a healthy rise truly driven by capital. For ordinary investors, facing this upward trend built on extremely low trading volume, it is prudent to remain cautious and be alert to the risks of liquidity exhaustion, because when the “mirage” dissipates, it is often the most dangerous moment.