Can the bid-ask size of a cryptocurrency impact its price volatility?

1 answers

• May 03, 2022 · 3 years ago
  The bid-ask size of a cryptocurrency can have a significant impact on its price volatility. When the bid-ask size is large, it means that there are many buyers and sellers in the market, which can help absorb large buy or sell orders without causing drastic price movements. This leads to lower volatility. Conversely, when the bid-ask size is small, it indicates a lack of liquidity, making the price more vulnerable to large price swings. Therefore, the bid-ask size is an important factor to consider when evaluating the potential volatility of a cryptocurrency.
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