What Is ‘Slippage’ and How Does Deep Liquidity Mitigate Its Impact on Large Cryptocurrency Trades?

Slippage is the difference between the expected price of a trade and the price at which the trade is actually executed. It commonly occurs in volatile markets or when trading low-liquidity assets.

Deep liquidity mitigates slippage because it means there are large volumes of assets available near the current market price. A large trade can be filled without moving significantly up or down the order book, thus keeping the execution price close to the expected quote.