What Role Does Market Liquidity Play in the Sustainability of an Altcoin Season?

Market liquidity is crucial for the sustainability of an altcoin season. High liquidity, characterized by deep order books and low slippage, allows for large amounts of capital to flow into and out of altcoins without causing drastic price swings.

During an altcoin season, liquidity needs to be sufficient to absorb profit-taking and attract new investors. If liquidity is thin, a few large sellers can easily crash prices, prematurely ending the rally and causing a cascade of panic selling.

Sustainable altcoin seasons are therefore dependent on a robust and growing pool of liquidity across multiple exchanges and trading pairs.