Understanding market depth helps traders gauge a particular cryptocurrency’s liquidity and potential price movements.
In cryptocurrency trading, market depth describes the market’s capacity to withstand significant orders without appreciably impacting price.
It is a liquidity metric that shows how many buy and sell orders there are for a given cryptocurrency at different price points. So, how is market depth displayed? A depth chart is commonly used to illustrate this data. It plots buy orders (bids) on one side and sell orders (asks) on the other against price levels.
