2026-01-07 05:29:19

Order book depth is shallow, and the risk is high. When liquidity is weak, just a few orders can cause exaggerated price fluctuations—cryptocurrency prices soaring by 5%, 10%, or even more dramatic percentages, which can be shocking. But these types of market movements have a characteristic: they come quickly and go quickly. Such superficial gains are often quickly retraced, and investors can easily get caught off guard.

This is especially true for trading products like Bitcoin options and small-cap coin contracts, where liquidity fluctuations are even more pronounced. Without sufficient buy and sell orders to support, prices tend to form spikes. Understanding the order book structure and liquidity depth is crucial for assessing the authenticity and sustainability of market trends.

BTC-0.05%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

15 Likes

Reward
15
5
Repost
Share

Comment

0/400

BlindBoxVictim

· 01-09 23:42

Isn't this just my daily routine? I get trapped so tightly in the blink of an eye.

View OriginalReply0

GateUser-26d7f434

· 01-09 12:53

This kind of fake pump and dump is the most annoying, almost got caught every time.

View OriginalReply0

BrokeBeans

· 01-07 05:58

Only then did I realize that if I had looked at the order book depth earlier, it wouldn't have been so bad.

View OriginalReply0

InscriptionGriller

· 01-07 05:54

Wow, this is the classic tactic of cutting leeks. As soon as the order book thins out, they start pumping the price. A few big players dump, and the leeks are eaten alive. Small coin contracts are even more ridiculous, with no liquidity to support the price. When the price soars, it’s like riding a rocket, then it drops right back down. Playing with this stuff, it’s no surprise to lose money. I’ve seen this kind of market move too many times. Genuine sustained increases don’t spike and jump around like this. The smell of a pump-and-dump scheme is too strong.

View OriginalReply0

DefiEngineerJack

· 01-07 05:46

well, *actually* if you're not monitoring order book microstructure in real-time, you're just gambling with extra steps. saw this exact pattern play out on some shitcoin last week—classic pump and dump wrapped in thin liquidity. the formal verification angle here is... people still don't get nash equilibrium implications for market makers lol

Reply0