Definition ∞ Bitcoin price friction refers to the resistance or impediments that hinder the smooth and rapid movement of Bitcoin’s price. This can result from illiquidity, significant bid-ask spreads, or concentrated order books that prevent efficient execution of large trades. Such friction makes it challenging for prices to adjust quickly to new information or substantial trading volume. It reflects underlying market inefficiencies or structural constraints.
Context ∞ Discussions about Bitcoin price friction often appear in news concerning market efficiency, liquidity, and the impact of large institutional trades. Analysts regularly assess how factors like market depth and exchange infrastructure contribute to or alleviate this friction. A key consideration for future market development involves reducing these impediments to ensure more fluid price discovery and execution across trading venues.
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