Crypto Slippage Explained: Why It Happens and How to Avoid It
Have you ever placed a crypto trade only to get a different price than expected? That’s slippage—an often overlooked but important concept in crypto trading. Understanding how it works can save you money and reduce frustration.
What Is Slippage?
Slippage is the difference between the expected price of a trade and the actual price at execution. It can be:
Negative slippage: You pay more or receive less than expected.
Positive slippage: You get a better price than expected (less common).
Slippage occurs on both centralized (CEX) and decentralized (DEX) platforms, especially during times of high volatility or low liquidity.
Why Does Slippage Happen?
Market Volatility
Crypto prices move fast. When markets swing suddenly, the price can shift before your order is filled.
Low Liquidity
If there aren’t enough buyers/sellers at your target price, your trade may execute at the next available (worse) price.
Large Order Size
Big trades may consume all available volume at one price, spilling into worse prices further down the order book.
Market Orders
These execute immediately at the best available price—but that could be far from your intended target.
How to Reduce Slippage
While slippage is common, here are six smart ways to reduce it:
1. Use Limit Orders
Limit orders let you choose the maximum (buy) or minimum (sell) price you’ll accept. This avoids surprises.
2. Trade High-Volume Pairs
Stick to pairs like BTC/USDT or ETH/USDT with deep liquidity and tighter spreads, especially on platforms like BitMart.
3. Avoid Peak Volatility
Refrain from trading during major news releases or token listings when prices fluctuate rapidly.
4. Break Up Large Orders
Split large trades into smaller ones to avoid wiping out the order book and triggering worse pricing.
5. Set Slippage Tolerance on DEXs
When swapping on DEXs like Uniswap or PancakeSwap, set your slippage tolerance (e.g., 0.5%–2%) to control risk.
6. Use Smart Routing or Aggregators
Some platforms and tools route orders across multiple pools for better pricing. BitMart and DEX aggregators like 1inch can help here.
Final Thoughts
Slippage is a natural part of crypto trading—but with smart strategies, you can minimize its impact. Whether you’re using a CEX like BitMart or a DEX, always trade with a plan.
Key Takeaways:
Slippage happens when trade execution prices differ from expected prices.
Volatility, low liquidity, and large orders are main causes.
Use limit orders, avoid trading during high volatility, and break large trades into smaller parts.
FAQs
1. What is a good slippage tolerance to use?
For stablecoins or high-volume pairs: 0.1%–0.5%.
For volatile tokens: up to 2%–3%, but higher risk.
2. Is slippage always bad?
Not always—positive slippage means you get a better price than expected. But most traders aim to reduce negative slippage.
3. Can I cancel a trade after slippage occurs?
No. Once a trade is executed, it’s final. That’s why setting a limit or slippage tolerance is important before confirming.
4. Does slippage affect spot or futures more?
Both can be affected, but futures markets tend to have deeper liquidity for major pairs, resulting in lower slippage.
