How do ask and bid prices affect the trading of cryptocurrencies?

1 answers

• Dec 18, 2021 · 3 years ago
  In the world of cryptocurrency trading, ask and bid prices are the bread and butter of the market. They are the foundation upon which all trading decisions are made. When a trader wants to buy a cryptocurrency, they will look at the ask price, which represents the lowest price at which someone is willing to sell. On the other hand, when a trader wants to sell, they will look at the bid price, which represents the highest price at which someone is willing to buy. The difference between these two prices, known as the spread, is an important indicator of market liquidity. A narrow spread indicates a liquid market with many buyers and sellers, while a wide spread suggests a less liquid market. Traders use ask and bid prices to determine the current market price and decide whether to buy or sell.
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