Institutions face challenges with Bitcoin liquidity as market depth is often thin, especially during off-peak hours, leading to higher execution costs and price slippage. Spot market depth, derivatives positioning, ETF flows, and stablecoin rails all contribute to overall liquidity, which fluctuates intraday and influences trade predictability. A comprehensive liquidity analysis including order book depth, derivatives leverage, ETF creation/redemption, and stablecoin movement is essential to gauge true market health beyond volume metrics.

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