In the crypto world, liquidity is a vital yet complex concept. In any market, liquidity refers to how easily an asset can be bought or sold without causing a significant change in its price.
High liquidity means there's plenty of trading activity, making it easier to buy and sell assets at stable prices. In contrast, low liquidity can lead to higher volatility, larger spreads, and potential delays in executing trades. Here's a detailed guide on how to choose a market for high-volume trading.
How to choose a market for high-volume trading
One key factor in choosing a market for high-volume trading is liquidity depth. It measures the volume of buy and sell orders and exchange's capability of absorbing large market orders without triggering significant price changes, called slippage.
This analysis reveals significant differences in liquidity depth across major centralized crypto exchanges in both spot and futures markets. Several factors influence liquidity depth on crypto exchanges:
User Base – a large and active trading community ensures continuous order flow and tighter spreads, as seen with Binance’s dominance in the spot market due to its vast global reach.
Institutional Presence – high-frequency trading and market-making enhance liquidity.
Wash Trading – some exchanges inflate volumes artificially, and suspicious trading activity raises concerns about transparency and actual market depth.
Trending spot and futures pairs on CEXs in January 2025 | CryptoRank
The crypto leading ahead
As reported by Crytporank, Binance consistently led the spot market with unparalleled liquidity depth in the majority of trading pairs. On the other hand, MEXC emerged as the leader in the futures market, showcasing impressive depth in BTC, ETH, and SOL pairs.
Also, Bybit’s strong performance in the futures market contrasts its lower spot market ranking, highlighting its strategic focus on derivative trading. Conversely, OKX consistently ranked lowest in both markets, indicating room for improvement in its liquidity offerings.
Pros and Cons of high and low liquidity | Cryptorank
