Liquidity is the ability to buy or sell an asset quickly, without causing significant price fluctuations. Learn more here.

Liquidity is the lifeblood of efficient crypto trading. It determines how quickly and smoothly assets can be bought or sold at stable prices. And yet, many traders tend to overlook liquidity’s role in reducing 

, tightening spreads and improving execution speed — all of which directly impact profitability.

Bybit has made significant strides in improving liquidity across its trading pairs, ensuring that traders benefit from faster execution, better pricing and minimal market impact across markets. This article will explore what liquidity is, why it matters, how to measure it — and why Bybit offers one of the most liquid trading environments in the industry.

Liquidity is the ability to buy or sell an asset quickly, without causing significant price fluctuations. In crypto trading, liquidity is determined by trading volume, order book depth and market participation. A highly liquid market ensures tighter spreads, faster order execution and reduced slippage, providing a more stable and efficient trading experience.

. When many buyers and sellers actively place orders, transactions occur swiftly and price movements remain stable. Conversely, a lack of liquidity can lead to price gaps, delays and higher trading costs.

A deep order book is key to strong liquidity, with large quantities of buy and sell orders spread across multiple price levels. This means that when a trader places a large order, it’s absorbed by the existing orders, without drastically moving the market price. In contrast, an illiquid market has fewer participants and a shallower order book, so that a single order for an asset could drastically shift its price. This leads to greater price volatility and higher execution costs.

 play a crucial role in maintaining liquidity by continually placing buy and sell orders. By providing a steady flow of orders, they help stabilize prices and narrow the 

, ensuring smoother trading conditions for all participants.

In crypto trading, liquidity also varies between 

 Spot liquidity is reflected in lower spreads, meaning traders can buy or sell assets at more competitive prices. In contrast, lower slippage is the key measure in other types of trading.

Liquidity has an impact on every aspect of trading, from execution speed to profitability. The following considerations make liquidity a key factor for traders.

A tighter bid-ask spread ensures traders 

 at fairer prices. This is especially beneficial for 

 who rely on small price movements for profits.

Minimal slippage and better price stability

Liquidity determines the degree to which an order affects price levels. In a highly liquid market, a $100,000 trade might move an asset’s price by only a fraction of a percent, while in an illiquid market, the same trade could cause a sharp price swing.

Liquidity allows traders to execute orders almost instantly at the expected price. In contrast, low-liquidity conditions may mean that, due to market fluctuations, orders will take longer to fill, or may execute at unfavorable prices.

During sudden price movements, a deep order book absorbs large trades, preventing extreme spikes or crashes. This is crucial for maintaining price stability in volatile markets: traders can execute strategies with greater confidence, knowing that price fluctuations will be more controlled.

How to identify and measure liquidity in crypto trading

While many traders assume liquidity is measured simply by trading volume, a deeper analysis is required to assess true liquidity conditions. The following section explains how traders can evaluate liquidity effectively.

A deeper order book means that multiple buy and sell orders exist across different price levels, supporting efficient trade execution with minimal price movement This is a strong indicator of liquidity, since it reflects a market’s ability to handle both small and large orders without sudden price fluctuations. 

 pair on Bybit has consistently shown strong order book depth, with the top three bid and ask levels holding significantly higher quantities as compared to other platforms. This enables smoother execution for all traders, from retail investors to institutions. 

A true test of liquidity is the degree to which the market price moves when executing a large order. In a highly liquid market, trades are absorbed across multiple levels, ensuring minimal slippage and price disruption. 

Traders can simulate a large market order by entering a significant trade volume and observing how much the price shifts before execution. A market order that significantly changes the last traded price suggests lower liquidity and potential inefficiencies in trade execution. 

For example, in order to move an asset’s price from $1,877.64 to $1877.66 on Bybit, you’ll need to buy 57.02856 + 168.67890 + 26.21569. Likewise, in order to move the price from $1,877.63 to $1,877.60, you’ll need to sell 114.28408 + 16.35036 + 17.30490.

Order absorption measures how well a market handles large trades without causing price spikes or slippage. A highly liquid market has deeper buy and sell walls, allowing it to process large transactions smoothly.

Here’s an example: For Bybit’s ETH/USDT pair, large trades require consuming multiple price levels before affecting the last traded price. This ensures stability even during high trading volumes. A trader purchasing 30 ETH only absorbs Level 1 and Level 2 sell orders, whereas on lower-liquidity platforms, multiple levels would be affected, increasing price volatility.

This high order absorption capacity is vital for traders executing large transactions, ensuring consistent execution quality across all market conditions.

The bid-ask spread represents the difference between the highest bid price (what buyers are willing to pay) and the lowest ask price (what sellers are willing to accept). A narrower spread indicates stronger liquidity, because it means there are many active buyers and sellers competing for the best prices. Conversely, a wider spread suggests a more illiquid market, leading to higher trading costs and greater price fluctuations.

The first consideration is to compare the order book depths between different exchanges. Exchanges with higher quantities at each price level (for both bid and ask) suggest higher liquidity.

Step 1: Identify the initial market price

Step 2: Simulate a market order (without executing it)

Step 3: Calculate the final execution price

Step 5: Compare the market impact between exchanges

Bybit’s approach to liquidity: Building the best trading experience

Bybit has implemented advanced liquidity solutions to ensure traders experience tight spreads, fast execution and minimal slippage.

One of Bybit’s most significant advancements is its Retail Price Improvement (

) Order, a first-of-its-kind feature designed to enhance liquidity specifically for retail traders. Unlike traditional market-making models, which oftentimes prioritize institutional orders, RPI orders provide retail traders with access to deeper liquidity pools, ensuring better prices and deeper order book support.

Bybit has also strengthened its liquidity infrastructure through strategic partnerships with institutional liquidity providers. These collaborations increase market depth, reduce slippage and improve overall trading efficiency across spot markets.

The impact of Bybit’s liquidity innovations

Following the introduction of RPI orders and enhanced market-making strategies, Bybit has seen substantial improvements in liquidity across key trading pairs. The results are clear:

Bybit’s liquidity enhancements have created a more efficient and stable trading environment, benefiting both retail and institutional traders.

For retail traders, Bybit’s liquidity improvements mean faster order execution, lower trading costs and better pricing. By ensuring better liquidity conditions, Bybit makes it possible for traders to execute their strategies with greater confidence and efficiency.

For high-volume and institutional traders, deeper liquidity pools ensure that large orders can be executed without significantly moving the market price. This is crucial for traders managing large portfolios or executing algorithmic trading strategies.

Bybit’s liquidity solutions also enhance overall market efficiency, improving execution quality across all trading pairs.

Liquidity is the backbone of efficient crypto trading, shaping everything from execution speed to price stability. Bybit has consistently demonstrated its commitment to providing a highly liquid market through innovations like RPI orders, deep order book depth and strategic partnerships with institutional liquidity providers.

Whether you’re a retail trader seeking tighter spreads and faster execution or an institutional trader executing large orders with minimal price impact, Bybit will offer you a best-in-class trading experience. 

If you value fast execution, minimal slippage and a robust liquidity environment, Bybit is the exchange of choice.

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Liquidity in crypto trading: Why it matters and how to spot the best conditions

Bitcoin's Price Officially Breaks $100,000: 4 Key Drivers Behind the Milestone

 has officially crossed the $100,000 mark, setting new all-time highs. Once dismissed by many as a scam or speculative experiment, Bitcoin has grown to become one of the top 20 most valuable assets globally, with a total market cap nearing $2 trillion. Over the past decade, Bitcoin has undergone one of the most significant perception shifts in financial history, with mass media and institutions reversing their skepticism and embracing its potential. The $100K milestone represents more than just a price point—it’s the result of years of increasing mainstream acceptance. Institutional investors are integrating Bitcoin into their portfolios, Bitcoin ETFs are breaking records, favorable global economic trends are driving demand, and political shifts are creating a more supportive environment. Let’s take a closer look at the key factors behind Bitcoin’s rise to over $100,000.

US Bitcoin ETFs: Validation For Traditional Investors

On January 10th, the SEC granted regulatory approval for 11 U.S. Bitcoin exchange-traded funds (ETFs). While European-listed exchange-traded notes (ETNs) had been available for years, the approval and launch of U.S.-based Bitcoin ETFs marked a pivotal moment for Bitcoin. This milestone not only eliminated significant barriers to entry for traditional investors but also reshaped public perception of Bitcoin as a legitimate and regulated financial asset. Here are some highlights.

Macroeconomic Factors: Bitcoin as a Hedge

Global economic conditions have increasingly positioned Bitcoin as an alternative investment for investors looking to protect and grow their wealth. Traditional investment options like bonds and savings accounts have become less attractive due to a combination of low interest rates, rising inflation, and negative real yields in several major economies. These shifts have driven both retail and institutional investors to view Bitcoin as a hedge against economic instability and a store of value, often referred to as digital gold.

Political Support: A Crypto-Friendly Climate

The political and regulatory climate is increasingly tilting in favor of cryptocurrencies, providing strong momentum for Bitcoin's growth. Governments and policymakers worldwide are recognizing the potential of blockchain technology and digital assets, shifting from skepticism to proactive engagement. These political tailwinds, coupled with regulatory advancements, are fostering a more secure and predictable environment for Bitcoin, boosting investor confidence.

Continued Institutional Adoption: Bitcoin Goes Mainstream

Institutional investors and corporations are driving Bitcoin’s transformation from a niche digital asset to a widely accepted investment and financial tool. Seen as a hedge against inflation, a store of value, and an alternative to traditional financial instruments, Bitcoin’s appeal has surged among major players in the financial world. This growing adoption is a key factor in Bitcoin’s price reaching new highs, underpinned by its integration into treasury strategies, investment portfolios, and payment systems.

Conclusion: Your Opportunity to Join the Bitcoin Momentum

As Bitcoin soars past the $100,000 pricepoint and sets the stage for further growth, there’s no better time to take your trading to the next level. Bybit (powered by SATOS) invites Dutch traders to participate in our 

, where you can can win an VIP trial to enjoy 

This exclusive event is your chance to experience Bybit’s industry-leading VIP Program while capitalizing on Bitcoin’s historic rise. Don’t miss out—

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Bitcoin Officially Breaks $100,000: 4 Key Drivers Behind the Milestone

Ondo Finance has launched a new institutional-grade bridging solution for tokenized real-world assets (RWAs), leveraging LayerZero’s decentralized verifier network (DVN) for enhanced security.

The S&P 500 rose 0.57% to a record high, driven by investor focus on upcoming inflation data, despite concerns over new tariff threats and the Federal Reserve's cautious stance on rate cuts.  Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 2.60%, with Bitcoin and Ether dropping by 4.08% and 3.27%, respectively in the past 24 hours.

Today's top performer is FTM, which surged 9.9% following Sonic Labs' partnership with OctavFi for advanced on-chain financial management.

Sonic Labs (FTM), founded in 2018, formerly known as Fantom Foundation, supports the development of Sonic, a new layer-1 blockchain designed for fast, efficient transactions and secure connectivity to Ethereum. It focuses on creating decentralized applications and managing governance for the Sonic ecosystem, which is set to launch later in the year. 

 to bring institutional-level financial management, advanced on-chain treasury management, and financial reporting to its protocols.

Check Out the Latest Prices, Charts, and Data of 

 a new institutional-grade bridging solution for tokenized real-world assets (RWAs), leveraging LayerZero’s decentralized verifier network (DVN) for enhanced security. This solution enables seamless transfers of USDY, Ondo’s yield-bearing tokenized US Treasuries, across Ethereum, Arbitrum, and Mantle. The bridging architecture incorporates trusted bridge providers like PolyhedraZK and Axelar, along with Ondo’s own DVN, ensuring secure and decentralized transaction validation. The integration is available now via Ondo’s frontend and Stargate Finance, with support for additional chains planned.

Yesterday, BTC spot ETF flows recorded a total outflow of $122.8M, including $36.1M from GBTC and $86.7M from non-GBTC funds.

Check Out the Latest Prices, Charts, and Data of  

, requiring wallet and social handle registration by Dec 2, 2024, 2 PM UTC. Eligibility criteria include completing 3 transactions across 2 apps on Movement's testnets and finishing Road to Parthenon quests. After TGE, users can claim MOVE tokens on Ethereum Mainnet or Movement Mainnet, with the latter offering a 1.25x multiplier. More airdrop seasons will follow post-mainnet launch.

Beginner

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Ondo Launches Institutional-Grade Bridging for Tokenized RWAs with LayerZero Security

How to Use the Bybit Card to Earn 15% Cashback on Top of All Black Friday Deals

Originally an American tradition, Black Friday has evolved into a global shopping event and is now a significant date in the Dutch retail calendar. In the Netherlands, Black Friday has grown in popularity, with major retailers like Bol.com, Coolblue, MediaMarkt, and Bijenkorf offering deals across a wide range of products.

As a nation known for valuing savings, Black Friday provides an excellent opportunity to stack discounts and maximize value. Bybit's Black Friday Card Promotion adds an extra layer of savings with 

 on both online and offline purchases. Explore how the Bybit Card works, along with practical examples of savings during Black Friday shopping, to make the most of this year’s event.

How Can You Take Part in This Black Friday Promotion?

Joining the Bybit Black Friday Promotion is simple! Follow these steps to start earning 

 ontop of all your Black Friday deals Weekend:

Practical Examples of Savings With Bybit Card

Simply input your Bybit Card details at checkout or use instant payment methods like 

 to complete your online purchases seamlessly. Cashback is automatically applied to your account, making savings effortless.

For offline purchases, use your Bybit Card as a physical card or digitally through 

. As long as the store accepts PIN payments, you’ll earn cashback rewards instantly.

After the Black Friday promotion ends, the Bybit Card reverts to its 

 offer, allowing you to save on all your purchases through the rest of the year. Whether you’re buying Sinterklaas gifts, stocking up for Christmas, or grabbing post-holiday deals, the savings keep rolling in.

The Bybit Card is your ticket to maximizing savings on the biggest shopping day of the year. From tech to festive essentials, every purchase becomes more rewarding.

Learn more about the Bybit Card Black Friday Promotion 

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How Can You Use the Bybit Card to Earn 15% Cashback on Top of All Black Friday Deals?

Bybit Guide

Stop the juggling multiple accounts to manage your assets. Here's what you need to streamline your portfolio. 

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Until recently, you may have been juggling multiple Bybit accounts to trade Spot, Derivatives and USDC Options. The launch of the 

 (UTA) gives traders a powerful option to combine trading and cross-collateral margining under one single account. 

Designed to simplify the trading experience 

, from retail traders to professional institutional investors, the UTA supports one-click access to all Bybit core trading products — 

This all-in-one solution streamlines the trading experience, offering a range of benefits that cater to both novice and seasoned traders. Read on to explore eight compelling reasons to make the switch to Bybit's UTA.

Unified Trading Account vs. Standard Account: The Differences

The Standard Account is Bybit’s legacy account option. However, since September 2023, Bybit has begun gradually transitioning new users to the Unified Trading Account. 

The Standard Account requires traders to hold specific assets for specific trading activities. In contrast, the UTA allows traders to use various supported margin assets (as collateral), which are then converted into USD for trading. This means traders don't need the exact settlement coin for a product, enhancing capital utilization and providing more flexibility and efficiency in trading.

 between the two accounts are as follows:

: We recommend users upgrade their sub-account to UTA before converting their main account, as the function is not reversible. 

Benefits of Upgrading Simple Mode to UTA 

Aside from the operational convenience of combining all trading instruments into a single account, Unified Trading Accounts offer users several key trading benefits.

The Bybit Unified Trading Account consolidates your trading activities, eliminating the need to juggle multiple accounts. With a single account, you can seamlessly trade Spot, USDT Perpetual, USDC Perpetual and USDC Options without having to transfer funds to multiple accounts for different product transactions. This unified approach simplifies asset management, letting you focus on trading strategies rather than account logistics.

Different traders have individual risk appetites and strategies. For this reason, the Bybit Unified Trading Account offers three margin modes to cater to every trader profile.

The UTA enhances capital efficiency by allowing traders to use unrealized profits to open new positions. This means that even if a position hasn't been closed, its unrealized gains can be leveraged for new trades.

For example, let’s assume that a user holds 3,000 USDT in their wallet and has three open positions:

At this time, their available USDT balance to open new positions is as follows:

Wallet Balance (3,000 USDT) + Perp & Future Unrealized P&L (0 USDT) − Total Initial Margin (1,340 USDT) = 1,660 USDT

As the price fluctuates, there will be changes in their P&L:

Wallet Balance (3,000 USDT) + Perp & Future Unrealized P&L (2,400 USDT) − Total Initial Margin (1,340 USDT) = 4,060 USDT

Over 80 Popular Assets Available as Collateral

With support for more than 80 popular assets as collateral, the Bybit Unified Trading Account ensures that traders don't miss out on opportunities. This feature also supports collateral asset customization, ensuring that trading activities are secured without the need to sell settlement assets.

 is a unique feature exclusive to the Unified Trading Account. It's designed to enhance the security of your Perpetual contracts, and uses Options based on intelligent recommendations to shield your Perpetual contracts from potential risks.

Imagine you're trading in a highly volatile market, and are concerned about sudden price drops. Perp Protect can automatically buy Options for you based on smart algorithms, ensuring that your Perpetual contracts are safeguarded against unexpected downturns. This tool acts as an industry-first downside protection, ensuring that traders can operate with an added layer of security.

As an illustration of using Perp Protect, let’s say that you’ve encountered a trading position loss of $500. After choosing to use Perp Protect, you’d incur a cost of $60. However, the silver lining comes in the form of a compensation amounting to $543, courtesy of Perp Protect. When you factor in the cost of Perp Protect and the received compensation, you’re left with a significantly reduced total loss of just $17.

On the other hand, if you decide to navigate the markets without Perp Protect and find yourself in a similar situation with a loss of $500, that loss remains as is, without any compensation or mitigation.

The Bybit Unified Trading Account introduces an optimized way to calculate and monitor account risks, using the MMR to keep a closer eye on potential liquidation risks.

Let's say you're a trader who's always on the lookout for potential liquidation threats. With UTA, instead of constantly calculating and recalculating your risks the system uses the MMR to give you real-time insights into your liquidation risks. This means you can make informed decisions faster and with more accuracy.

For those new to the Bybit Unified Trading Account, or for users who want to test its features without any real-world risks, the UTA offers a 

 mode. This simulates a real-world trading environment, allowing users to get a feel for how the Unified Trading Account operates.

Imagine you're a newbie to the world of crypto trading. Instead of diving headfirst into the market with real funds, you can use Bybit’s Demo Trading feature, which will provide you with more than $130,000 in simulated funds. This allows you to practice and understand the nuances of trading within the UTA environment. It's like a sandbox mode that lets you learn, make mistakes and refine your strategies without any financial repercussions.

Seamless Repayment Process for Borrowed Assets

The Bybit Unified Trading Account simplifies the process of 

. With its efficient auto borrowing feature, traders can open trades without any interest (this is applicable only to USDT and USDC loans within the interest-free range). Additionally, the UTA offers flexibility in choosing which assets to use for repayment.

Suppose you've borrowed some USDT for trading, and now it's time to repay. Instead of going through a lengthy repayment process, the UTA supports interest-free auto borrowing, which means you can quickly and seamlessly repay your borrowed amount without incurring extra costs. 

Furthermore, if you have multiple assets in your account, you can choose which one to use for repayment, giving you more control over your finances.

 is quick and easy. Simply follow our step-by-step guide below.

 that the upgrade to the Bybit Unified Trading Account is 

Your account will take approximately one minute to finish upgrading. While the upgrade is underway, please avoid trading or transferring assets. 

After the upgrade is complete, you’ll be able to use your Unified Trading Account to trade Spot (including Margin), Leveraged Tokens, USDT Perpetual, USDC Perpetual and Options. You’ll also be able to use your Inverse Derivatives Account to trade Inverse Contracts. The function of the Funding Account will remain unchanged, and you’ll be able to make deposits or withdrawals via your Funding Account. 

Before you start trading, make sure you've read and understood the risk management and trading requirements. After the upgrade, you can celebrate having more efficient capital utilization, enhanced risk management, and one-click access to a wider range of trading products.

 More than just a trading account, the Bybit Unified Trading Account is a comprehensive trading solution. By consolidating multiple features and tools into one platform, Bybit gives you everything you need at your fingertips. Whether you're a seasoned trader or just starting out, the UTA offers a range of benefits that can enhance your trading experience. 

 and discover the future of crypto trading!

8 Key Benefits of Upgrading to Bybit’s Unified Trading Account

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards