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 Trading Bot

Learn how to automate your trades by buying the lows and selling at the high within predefined intervals and price ranges with Bybit's crypto trading bots.

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 are automated computer programs that can help you buy low and sell high — place buy and sell orders at predetermined intervals within a predefined price range — automatically to capitalize on price fluctuations, especially in a volatile 24/7 crypto market.
But how does it work actually and can you really profit more substantially using a grid bot? Here's what you need to know about Bybit's Grid Bots.

orders in either price direction, creating a trading grid of orders waiting to be triggered. When the price hits your preset target, a buy order will be executed, and a sell order will be placed above on the next grid. When the price rises again to the next grid, the sell order will be executed, allowing you to profit from the price difference.

Whether you prefer owning the underlying and taking advantage of the volatility with the Spot market or dabbling with derivatives for increased leverage with the Futures market, Bybit has you covered with our Spot and Futures Grid Bots that will help take the emotions out of your trades and automate the tedious process of manually placing orders.

Suppose Trader A creates a Spot Grid Bot with the following parameters:

The system will calculate the actual amount in base token required to place an order and then automatically buy the corresponding amount of base token needed for the grid trading strategy by placing market orders.

When the grid trading strategy is successfully activated, the orders will be placed as follows:

When the BTC price hits 53,000 USDT, the buy order will be executed, and the sell order at 57,000 USDT will be placed above the next grid. When the price rises to 57,000 USDT, the sell order will be executed, and a buy order at 53,000 USDT will be placed — that is, a grid trade is now completed and profits are made from the price difference.

When the BTC price rises to 57,000 USDT, no buy/sell orders will be triggered. In a one-sided market, the BTC price rises to 61,000 USDT, which will trigger a sell order and place a buy order at 57,000 USDT. 

If the price continues to rise and reaches 65,000 USDT, a sell order will be placed at 65,000 USDT, and a buy order placed at 61,000 USDT.

Your grid bot will only operate in the upper and lower price bounds that have been configured. When the BTC price rises above 65,000 USDT or falls below 45,000 USDT, the strategy will be suspended and no new orders will be placed by the grid bot. 

If the market price falls outside of the price range, you can choose either to close the grid trading strategy to get the most out of your funds or wait for the price to return to the range you’ve set, at which time the strategy will resume. 

— Entry orders will be bought at the market price to ensure the successful execution of the grid strategy.

— Grid trading will be channeled directly through your Bybit Spot Account and Trading Bot Account. 

Grid trading is available for both desktop platform and app versions.

Here’s a step-by-step guide to help you create your first grid bot on Bybit.

Click on Create to begin the Grid Bot creation process.

 For this specific example, we'll be showcasing how you can create a Spot Grid Bot.

a. Create your grid bot with the following parameters:

b. You can click on Auto Fill to automatically enter intelligent parameter suggestions in your parameter settings. The recommended settings for AI parameters will be based on the historical data of the coin.

Please note that the higher the number of grids, the smaller the price intervals. This also means that your orders may be filled more frequently in a volatile market. However, your profits would be lower due to the multiple trading fees.

: Please double-check the grid bot information you've created, and then click on 

Your grid bot has been successfully created!

, the page will automatically redirect to

 in the upper right corner of the grid bot to enter the

page. More information about your active grid bots, including 

If you want to view your trading history, click on 

It’s important for you to understand how to calculate the profit of a grid trading strategy before creating your grid bot. The following is a guide to help you better understand the relationship between the different variables and the calculation of grid profit and total profit and loss.

Let's run an example to see how to calculate Grid Profit and Total P&L.

Suppose Trader A creates a grid trading strategy based on the following parameters:

Grid profits are realized from the auto buy and sell from the current grid trading strategy.

Grid Profit = Interval × Quantity of base token per grid (Buy Order) × Completed Grid Trade − Trading Fee

Trading Fee = Filled Order Quantity (Buy x Sell) x Trading Fee Rate x Sell Price

When the grid trading strategy is successfully activated, the base token required for the grid trading strategy will be automatically purchased, and the orders will be placed as follows: 

— You can view the quantity of each grid under 

— The quantity of sell orders is different from that of the buy orders due to the deduction of a 0.1% Spot trading fee.

When the BTC price hits 53,000 USDT, the buy order will be executed, and the sell order will be executed at 57,000 USDT, which will be placed above the next grid. When the price rises to 57,000 USDT, the sell order will be executed, and a buy order at 53,000 USDT will be placed. 

That is, a grid trade is completed and earns a profit of 341.81 USDT, based on the following calculation:

Grid Profit = 4,000 × 0.08795882 × 1 − 10.02 = 341.81 USDT

: Trading fee rates used here are for non-VIP users only. To learn more about Spot and Futures trading fees, please refer to 

The total profit is the grid profit plus the profit or loss of the base token.

Total Profit = (Equity of Base Token + Quote Token) − Total Investment

To view the value of the base token and quote token after the grid strategy has been successfully executed, please click on

on the right of the active grid bot column to enter the 

In this case, the position values ​​you can see under 

When the price rises to 57,000 USDT, Trader A's grid trading strategy completes a trade, profiting from the difference between 57,000 USDT and 53,000 USDT. As the price of BTC increases, so does the equity of the base token in your account: 

Total Profit = (57,000 × 0.17574172 + 14,452.26) − 23,610

Please note that when the base token value falls more than the profit earned by the grid bot, it will cause the total profit to turn negative.

Setting Up Your Copy Trade of Grid Trading

Leaderboard Explained: You can copy grid trading strategies by following the top-performing traders on the Grid Bot leaderboard. There are the following two ranking lists: 

Grid bots are ranked by total annual percentage rate (total APR), which is the sum of the profit or loss of the base token and grid profits. The rankings show the top ten performing grid bots based on the total APR performance over the past 24 hours and the past 7 days, respectively.

To learn more about how to calculate total APR, please refer to 

Here’s a step-by-step guide to help you create your copy trade order.

: Select a grid bot you want to follow and click on 

: Double-check the order information and click on

— The same trading strategy may not lead to the same profit level, due to different entry prices.

What Is Bybit Trading Bot?

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards