Is slippage more common in volatile or illiquid cryptocurrencies?

4 answers

• Martha KiguwaApr 04, 2025 · 4 months ago
  Slippage in cryptocurrency trading occurs when the execution price of a trade differs from the expected price. It can be influenced by various factors, including market volatility and liquidity. In volatile cryptocurrencies, where prices can fluctuate rapidly, slippage is more likely to occur. This is because the market may not have enough buyers or sellers at the desired price, leading to a larger difference between the expected and executed prices. In illiquid cryptocurrencies, which have lower trading volumes, slippage can also be more common. With fewer participants in the market, it can be harder to find a counterparty for a trade at the desired price, resulting in slippage. To minimize slippage, traders can use limit orders and choose cryptocurrencies with higher liquidity.
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• Genevieve HarrisonApr 21, 2022 · 3 years ago
  Slippage is a common occurrence in cryptocurrency trading, especially in volatile or illiquid cryptocurrencies. When market conditions change rapidly or when there is low trading volume, it can be challenging to execute trades at the desired price. This can result in slippage, where the executed price differs from the expected price. Traders should be aware of the potential for slippage and consider using limit orders or other trading strategies to mitigate its impact.
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• CatDevilXMar 31, 2022 · 3 years ago
  Slippage is more common in volatile or illiquid cryptocurrencies. In volatile cryptocurrencies, sudden price movements can make it difficult to execute trades at the desired price, leading to slippage. Similarly, in illiquid cryptocurrencies with low trading volumes, it can be challenging to find a counterparty for a trade at the desired price, resulting in slippage. Traders should be cautious when trading these types of cryptocurrencies and consider the potential impact of slippage on their trades.
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• Amany Mohamed morsyJan 15, 2021 · 5 years ago
  Slippage can occur in both volatile and illiquid cryptocurrencies. In volatile cryptocurrencies, price movements can be rapid and unpredictable, making it harder to execute trades at the desired price. This can result in slippage, where the executed price differs from the expected price. In illiquid cryptocurrencies, where there is low trading volume, it can be challenging to find a counterparty for a trade at the desired price, leading to slippage. Traders should be aware of these risks and consider using trading strategies that minimize the impact of slippage.
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