For Customers Log in
Contact Us

Market Depth Meaning

A measure of the market's ability to handle large orders without a significant change in price. It is visualized through a "Depth Chart," which shows the cumulative volume of "Buy" and "Sell" orders at different price levels.

If a market has "Deep" depth, there are millions of dollars of orders sitting close to the current price. If it is "Shallow," a single $50,000 order might "clear the book" and move the price by 5%.

Traders look at depth to see where the "Resistance" and "Support" are-large "Walls" of orders that the price will have a hard time moving through. Market depth is dynamic; it can disappear instantly.

During a "Black Swan" event, market makers often "pull their orders" to avoid being run over by a fast-moving price. This "Evaporation of Liquidity" is what leads to "Flash Crashes," where the price drops 20% in seconds because there were no "Buy" orders left to catch it.

← Back to Glossary

Explore our services
Providing liquidity in the cryptocurrency market?
Authorize on our platform and do it smarter with FM Pulse.
pic

FM Marketplace

A reliable and high-performance crypto liquidity marketplace for institutions and businesses.

Learn more
pic

FM White Label

Launch your fully branded B2B crypto trading platform in under one week.

Learn more
pic

FM Liquidity Match

Crypto OTC-as-a-Service infrastructure for enhanced monetization and trade control.

Learn more

Scale your business, leave the hard work of your trading needs to us

Reduce your integration costs and operational risk across multiple access points with our platform

Get started