Why Is a Very Low Slippage Tolerance Often Impractical in High-Volatility Crypto Markets?
In high-volatility crypto markets, prices move so rapidly that even a small market order can experience a momentary price swing that exceeds a very low slippage tolerance (e.g. 0.1%).
Setting the tolerance too low will result in a high rate of failed transactions and order cancellations. This non-execution can be more costly than the small slippage itself, as the trader misses the intended trade and incurs transaction fees for the failed attempt.
