How Does the Order Book Depth Influence the Bid-Offer Spread on a Crypto Platform?

Order book depth refers to the volume of buy and sell orders at various price levels away from the current best bid and offer. Greater depth, meaning large volumes of orders near the best prices, provides confidence that large trades can be executed without moving the price much, thus encouraging market makers to maintain a tighter bid-offer spread.

Low depth leads to wider spreads.