Question n° 495 ·
Why can a flash crash on an illiquid exchange trading pair lead to large temporary Bitcoin price swings?
- Illiquid pairs lack depth, so small trades cannot move Bitcoin price
- Illiquid pairs lack depth, so small trades share Bitcoin price movement
- Illiquid pairs lack depth, so small trades swing Bitcoin price wildly Bonne réponse
Pourquoi est-ce la bonne réponse?
This is correct because markets with thin order books cannot absorb even modest buy or sell orders without moving price substantially. Beginners should know that low liquidity environments magnify the impact of each trade, causing exaggerated temporary price swings until deeper markets resume normal trading activity.