Liquidity gaps occur when there is a significant mismatch between supply and demand in a market, leading to sudden price changes. Use the settings below to simulate a price chart and observe how liquidity gaps form.
Liquidity gaps occur when there is a sudden imbalance between buyers and sellers in a market. This can lead to rapid price movements as the market struggles to find equilibrium.
Key factors include:
Formula for price change:
This formula helps explain how liquidity gaps can lead to sudden price changes.