TECHNICAL CONCEPTS
Market Depth
Definition
Market depth refers to the market's ability to sustain large orders without significantly impacting price. Deep markets have high liquidity and low price impact for large trades.
Example
Example
ETH/USDC has deep market depth on major exchanges, so trading $1M causes minimal price impact, unlike small altcoin pairs.
Risks to Consider
Risks
- Shallow markets
- High slippage
- Liquidity fragmentation