During sharp market swings, liquidity often fragments across exchanges. Order books thin out, spreads widen, and slippage increases. By analyzing order depth, trade volumes, and turnover ratios, one can assess how liquidity stress may amplify volatility or signal potential reversals.
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Investors should now factor in corporate BTC reserves when assessing token strength. High reserves may signal conviction but also increase price sensitivity to company-specific events.
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New instruments like ETFs and perpetuals amplify price swings by increasing leverage and speculative flows.
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