Definition ∞ Market Liquidity Build refers to the process where the ease with which an asset can be bought or sold without significantly affecting its price increases over time. This improvement is characterized by tighter bid-ask spreads, larger order books, and higher trading volumes. A build in market liquidity indicates growing participant interest and confidence, making the market more efficient and less prone to large price swings. It suggests a healthier and more robust trading environment.
Context ∞ Market Liquidity Build is a positive indicator often reported in cryptocurrency news, especially for newer digital assets or during market recovery phases. Increased liquidity attracts more institutional investors and facilitates larger transactions, reducing slippage for traders. Observing a consistent build in liquidity suggests increasing market maturity and reduced risk for participants, which supports long-term asset stability.
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