What is the significance of ask size and bid size in cryptocurrency trading?

1 answers

• Dec 25, 2021 · 3 years ago
  In the world of cryptocurrency trading, ask size and bid size are like the bread and butter of market analysis. The ask size represents the number of coins or tokens available for sale at a specific price, while the bid size represents the number of coins or tokens that buyers are willing to purchase at a specific price. These sizes provide valuable insights into the market dynamics and help traders understand the supply and demand balance. When the ask size is larger than the bid size, it indicates more sellers than buyers, which can create downward pressure on prices. Conversely, when the bid size is larger than the ask size, it indicates more buyers than sellers, which can create upward pressure on prices. Traders often use these sizes to identify potential support and resistance levels and make informed trading decisions. It's worth noting that different exchanges may have varying ask and bid sizes due to differences in liquidity and trading activity.
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