Definition ∞ Crypto Liquidity Slowdown refers to a reduction in the ease with which digital assets can be bought or sold without significantly affecting their market price. This condition manifests as lower trading volumes, wider bid-ask spreads, and decreased depth in order books across exchanges. When liquidity diminishes, executing large trades becomes more challenging and potentially more costly. It indicates decreased active participation from market makers and traders.
Context ∞ A liquidity slowdown can amplify price volatility, making assets more susceptible to large price swings from relatively smaller trades. News frequently covers such periods, especially during market downturns or regulatory uncertainty, as it signals reduced market health and potential challenges for investors. Monitoring this metric is vital for assessing market stability and the overall efficiency of digital asset trading environments.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
