What Is the Primary Cause of Price Gaps in the Crypto Market? ⎊ Path

What Is the Primary Cause of Price Gaps in the Crypto Market?

The primary cause of price gaps in the 24/7 crypto market is low liquidity and sudden, high-impact news events, particularly during periods of low trading volume, such as late nights or weekends. While crypto trades continuously, large institutional traders often reduce activity during these times.

A major news event can trigger a cascade of liquidations or market orders, overwhelming the thin order book and causing a rapid, gapped price change.

Why Do Short-Dated Options React More Violently to Sudden News Events?

How Do Different Lookback Periods (E.g. 30-Day Vs. 90-Day) Affect HV Calculation?

How Does a Sudden News Event Affect IV Instantly?

Can a Liquidity Pool with High Volatility but Low Volume Experience High Slippage?

What Is the Primary Trade-off LPs Face between High-Volume, Low-Fee Pools and Low-Volume, High-Fee Pools?

How Does a Sudden, Unexpected News Event Typically Affect Implied Volatility?

How Do Regulatory News Events Typically Impact the Implied Volatility of Crypto Options?

What Is the Relationship between an exchange’S Volume and the Index’s Rebalancing Costs?

Glossar

Price Gaps

Formation ⎊ Price gaps, within cryptocurrency and derivatives markets, represent discontinuities in price charts reflecting imbalances between buyers and sellers, often stemming from rapid information dissemination or order flow imbalances.