The price displayed on the cryptocurrency’s detail page is the marked price, which is the midpoint of the bid and asks prices.
When you’re buying a coin using a market order, your order may execute at the asking price, which is higher than the marked price.
When you’re selling a coin using a market order, your order may execute at the bid price, which is lower than the marked price.
If you are selling or buying a coin using a limit order, your order will be filled at exactly the price you want.
Cryptocurrency market orders are majorly impacted by two primary factors – slippage and market spread.
Cryptocurrency is extremely volatile. The price is moving up or down every second. Slippage refers to the difference in the expected price of a trade and the price at which the trade is actually executed.
Slippage mostly occurs during periods of extreme volatility where the coin of your choice is being traded heavily. It can also occur when there isn’t enough volume to maintain the current bid/ask spread.
For example, suppose that a trader wants to buy .5 BTC at $40000. However, there is no guarantee that his order will get executed at this price. By the time he places the order, BTC might already be trading at a higher price and his order will be executed at that price.
It can also happen based on your order size. In the same scenario mentioned above, suppose that you want to buy .5 BTC at $40000, but the next best seller only has .2 BTC. In this case, you will have to slip from one seller to the next and so on. Slipping through the order book means that the price of BTC gets higher and higher and your order will be executed at a different price.
The market spread or order book spread is the difference between the best bid price and the best ask price. It is maintained by the market markers who provide liquidity in the crypto markets. These market markets offer to both buy and sell an asset so that orders on both sides are filled.
For example, suppose that they are offering sellers $40000 to buy 1 BTC at a given time and offer $40100 to sell their 1 BTC. There is a difference between their buying price (ask price) and selling price (bid price). This $100 difference is called spread and it is how market makers are rewarded for providing liquidity.