Definition ∞ Deep market depth indicates a market’s capacity to absorb large buy or sell orders without significantly affecting the asset’s price. This condition signifies a substantial volume of open orders at various price points near the current market price. High market depth contributes to price stability and reduces slippage for large transactions. It is a key indicator of a market’s health and liquidity.
Context ∞ News reports often reference deep market depth when discussing an asset’s liquidity or a trading platform’s robustness. A lack of market depth can indicate vulnerability to price manipulation or heightened volatility. Observing changes in market depth provides valuable insight into investor confidence and overall market conditions.
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