Market illiquidity describes a condition where an asset cannot be easily bought or sold without significantly impacting its price. This state occurs when there are insufficient buyers or sellers in the market, leading to wide bid-ask spreads and difficulty in executing large orders at desired prices. It often results in increased price volatility and can deter large institutional participants. Illiquid markets present higher risks for investors seeking to enter or exit positions quickly.
Context
News often discusses market illiquidity during periods of extreme market stress or for assets with low trading volumes. This condition can exacerbate price crashes or make it challenging for investors to react to new information. Addressing market illiquidity through increased market depth and participation is a continuous goal for exchange operators and protocol developers.
Big investors are aggressively buying Chainlink, pushing the available supply on exchanges to its lowest level in two years, setting up a major price squeeze.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
