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.

Intermediate

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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

Here are three simple steps to take to prepare for the next bull run with Bybit: 1) Relearn how to get ahead in the crypto market, 2) Reset your trading strategies, 3) Refresh your understanding of Bybit’s latest products and activities.

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If you're like most people, you're probably still recovering from the last 

top cryptocurrencies have recently seen exciting gains 

while the Federal Reserve continues to raise rates in an effort to cool 

% and has remained at around these levels. Judging from their climb in the price charts, it's time to start thinking about the next bull run. And here we are, where the $BTC price broke the $30k price range and the trends continue, waking the bulls to push the price further, breaking the $35,000 mark per BTC on Oct 24, 2023.

There are a few necessary steps to prepare for a crypto 

. First, you should carefully research the crypto market to identify potential opportunities. While the market is showing signs of a bull run, market conditions can change abruptly. 

Here are three steps to ensure you're ready for the next big crypto opportunity with Bybit.

1) Relearn how to get ahead in the crypto market by understanding the latest bull run opportunities.

2) Reset your trading strategies to venture into the market at a slow and safe pace.

3) Refresh your understanding of Bybit’s latest next-level suite of products and activities. 

 is a market momentum phenomenon characterized by crypto prices rising rapidly to unprecedented heights. To be fully prepared for the next crypto bull run, you'll have to know the best strategies moving forward so that you can take advantage of this golden opportunity to reap incredible profits.

Of course, you'll always have to be prepared for any possible market 

 or even a bear market, especially with the Fed’s 

 to bring inflation under control. Regardless of the 

, you can always make profits as long as you understand how different markets behave during different cycles and adopt the right strategies for each cycle. 

By staying informed about recent developments in crypto trading and having a solid strategy in place, you can successfully navigate any type of market conditions you may encounter. 

Bybit offers numerous tools and products that can help you accelerate your asset growth in all market conditions, which will be explored later on in the article. Let's first take a look at the latest opportunities you shouldn't miss. 

. However, there are still some key developments you should look out for. The first is 

, which will cause the ETH supply to drop to an equivalent of three 

. There is also the Ethereum Shanghai upgrade which adds liquidity to Ethereum as well as the rise of Layer 2 (L2) projects that benefit from the Merge. With such developments, the 

Ethereum’s Cancun Upgrade is the next major step forward for the network that core developers have chosen to work on. Labeled the “Surge” portion of the 

’s road map, Cancun aims to improve the blockchain’s maximum number of transactions per second (

) without sacrificing concerns like security and ease of development for Layer 2 decentralized applications (

It's important to note that the Ethereum Cancun Upgrade isn’t merely a software update, but rather a significant milestone for Ethereum. In a nutshell, Cancun aims to improve the network's 

 and security and to lower transaction fees — which could attract more users to the network. According to 

 of the Ethereum Foundation, October 2023 is a feasible goal for Cancun's activation, which will include the following EIPs:

Why Is Everyone Talking About the Ethereum Cancun Upgrade?

Like The Merge, the Ethereum Cancun Upgrade represents yet another step in the right direction for the Ethereum Foundation and its core developers as they strive to complete the 

 portion of their road map. The execution of Cancun for the Ethereum blockchain marks the first significant step toward overall project progress, since Proto-Danksharding is a key EIP that must be executed to enhance transaction throughput. 

This has once again sparked interest in the long-term value of investing in Ethereum. It continues to become the most widely adopted smart contract platform to deliver on fulfilling the promises of its road map. With Cancun being imminent, interest is peaking in the potential upcoming volatility to come from the execution of this major network upgrade.

How You Can Profit From Ethereum Cancun Upgrade on Bybit

The upgrade presents the possibility of driving the crypto bull run, but there is no guarantee. This exciting Ethereum hard fork is brimming with endless possibilities. Bybit will also be launching campaigns and activities in line with the upcoming Cancun upgrade. The reward price pool is a whopping $335k USDT for investors and traders to bring home. 

If you’re considering investing in Ethereum L2 projects, Mantle is a project to keep an eye on. 

One challenge that has plagued Ethereum is its scalability. Numerous L2 projects have strived to address this challenge, and Mantle is the newest of these projects. 

 aims to make Ethereum hyper-scalable with its unique 

 approach that effectively solves the scalability, security, and decentralization 

. Through Mantle, you’ll be able to enjoy faster transaction finality with high security and low fees. 

. The governance token MNT is used as a gas token on the network, thereby giving more utility and value to MNT. This makes MNT a potentially favorable investment that you should consider buying and 

2. Best Trading and Investment Strategies for a Bull Run

In a bull market, prices can rise quickly while consumer sentiment remains high. These conditions may entice some investors to throw caution to the wind. However, the crypto market can be unpredictable. So even in a hot crypto bull run, taking a conservative approach and entering slowly to balance your risk and reward would be more advantageous. 

 (DCA) helps to moderate volatile price fluctuations and smoothen out average prices. That said, in a strong bull market, DCA may not be the best option if the prices keep rising. In such cases, it may be more profitable to invest a significant amount in a blue chip crypto and hold it.

The crypto market is fraught with risks, but there are ways to manage them regardless of market conditions. One method is to place 

 to automatically execute your order once the asset’s price dips to a predefined level. Another is to calculate the 

 which helps you determine a reasonable stop-loss and 

 describes the process of using borrowed funds to make crypto investments to magnify your position. Always practice 

 in moderation because while you can amplify your gains, it also exposes you to significant loss as your investment may be subject to a margin call or even liquidated if the price drops below a certain threshold. 

Timing the crypto market is virtually impossible due to constantly changing conditions and extreme volatility. With this in mind, securing profits regularly is a smart idea. By selling a small portion of your position for a profit, you can lock in your gains while still keeping the opportunity to profit from future price increases.

When you diversify your investments, you open up yourself to new opportunities and lower your risk simultaneously. Besides blue chip crypto and 

, for example, offers up to 2,000 USDC in rewards. You can stand to earn these rewards by simply depositing at least 50 USDC and meeting a minimum volume for derivatives trades. 

 your position to reduce your overall risk and maximize returns during bullish market cycles. Bybit is the only exchange that offers 

 is a low-risk product that enables you to stake your favorite tokens and 

 on them. It offers both flexible and fixed terms and you can choose to stake and unstake your tokens at any time.

, you use assets in your Spot Account as collateral to borrow funds from Bybit to trade. This allows you to enter at a larger position than regular spot trading and realize greater gains as a result, though it is also potentially riskier.

If you have more than one account on Bybit, you can consolidate those accounts with Bybit’s 

 (UTA) for endless optimized trades. With UTA, you can easily manage Spot, Spot Margin, USDT and USDC 

 as well as USDC Options all in one account without a need to transfer assets from one account to another. Your risk management is also enhanced as the margin is calculated at the account level rather than on the position. 

 an established trader’s trading strategies. 

By copying another trader’s portfolio, you can benefit from their experience without having to do any of the research yourself. Enhanced with 

, you have all the tools that will simplify your trade and reduce your risks so that you can make secure profits.

 lets you cruise through your trades with ease through automation. With trading bots, you will set the parameters for trading activities up front, and the bot will automatically execute activities to optimize returns and minimize losses. For the bull market, consider the 

, which is ideal regardless of any market conditions. The DCA Bot automates the DCA strategy for you and is highly customizable according to your investing preferences. And unlike standard grid trading, the 

 also works well in uptrending markets as it gives you the option to execute Long orders. 

 is another tool that allows you to profit based on market movement over a predetermined period. Whether the market moves upward or downward, an accurate prediction can yield a return, thereby making it suitable to use during bull runs. 

Liquidity is always high during bull markets thanks to high levels of trading activities. That means as a liquidity provider, you can earn more by adding liquidity to the liquidity pool. 

 allows those who add liquidity to its liquidity pools to profit off swap fees and 

. More trading equals more fees collected. You simply contribute assets to the liquidity pool and you will receive a daily yield. There is no locked period so you’re free to remove your assets anytime you want.

During a crypto bull run, one can expect more initial DEX offerings (

) to be held, which means more investment opportunities. With 

, you can get informed about the latest IDO projects and participate in them to purchase a token at its launch price to reap profits when the price rises later on. If you’re interested in trading NFTs, the 

 also offers you early access to low-price, high-quality NFTs that will appreciate quickly in value. In addition, you can enjoy the perks of a simplified decentralized exchange (

) with low fees and high leverage of up to 20x through 

 trading model that traditional traders are more familiar with. 

So, are you ready for the next crypto bull run? All you need to do is understand the latest opportunities in the crypto market, adjust your trading and investment strategies, and Bybit can help you with the rest with its comprehensive range of tools and products that are collectively suitable for all investment strategies and market conditions. So 

3 Steps To Get Ready for the Next Bull Run With Bybit

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards