What is Slippage in Crypto? Why Your Trade Price Never Matches Your Expectation

When you execute a trade in the cryptocurrency market, you might have noticed something frustrating: the price you see on screen when you place an order isn’t always the price you actually pay. This difference is called slippage, and it’s one of the most common—and often misunderstood—phenomena in crypto trading.

Understanding the Slippage Problem

Slippage refers to the gap between the price you expected to execute a trade at and the actual price your order fills. Whether you’re buying or selling, this mismatch happens regularly in the crypto market, especially when conditions turn turbulent. For example, if Bitcoin is trading at $43,000 and you place a market order to buy, by the time your order reaches the order book and gets filled, Bitcoin might have jumped to $43,200—meaning you pay more than anticipated.

Why Does Slippage Happen?

Several interconnected factors create the conditions for slippage to occur:

Rapid Market Movement and Volatility Cryptocurrencies are famous for their wild price swings. In the seconds—or even milliseconds—between when you hit “buy” or “sell” and when your order actually executes on the exchange, the market price can shift significantly. This is especially true during high-volatility periods when major news breaks or market sentiment shifts suddenly.

The Liquidity Problem Not all cryptocurrency assets have equal buying and selling activity. In low-liquidity markets, there simply aren’t enough orders on the opposite side to fill yours at your desired price. When you place a large sell order in a thin market, you might end up hitting multiple price levels—selling some at your expected price, then moving to progressively lower prices to find remaining buyers.

Your Order Size Matters Large orders are market-movers. If you try to buy a substantial amount of a lesser-known altcoin or execute a significant trade in a low-volume market, your order itself can push the price. A major buy order might absorb all available seller liquidity at current prices and then have to dip into lower-priced sells, creating a worse average execution price than you anticipated.

Trading Platform Performance Not all exchanges are created equal. Platforms with slower response times, poor order-matching systems, or high latency experience greater slippage. A platform that routes your order efficiently with minimal delay will show less price difference compared to one with outdated infrastructure.

How to Protect Yourself from Slippage

The primary defense against slippage is using limit orders instead of market orders. With a limit order, you specify the exact maximum price you’ll pay when buying or the minimum price you’ll accept when selling. This gives you control and prevents worse-than-expected fills.

The trade-off? Limit orders don’t guarantee execution. If the market price never reaches your limit price, your order sits unfilled. For large trades or when dealing with volatile or illiquid assets, many traders accept this risk in exchange for price certainty.

Understanding slippage helps you trade more strategically. By recognizing when slippage is most likely to occur—during market chaos, with low-liquidity tokens, or with oversized orders—you can adjust your approach and choose the right order type for your situation.