Crypto Exchange Liquidity and Why It Matters, Explained By Cointelegraph



We’ve discussed at length the benefits of higher liquidity and some of the risks of low liquidity, but it’s worth making those risks explicit, as well as mentioning some of the potential benefits of low liquidity for a trader.

Fundamentally, lower liquidity leads to less stable prices for an asset, meaning that slippage and price manipulation are risks in low liquidity environments, but also, dips in price can be turned into flash crashes. The lack of market participants can lead to long waiting times, which especially during a market swing can be detrimental to a trader.

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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