What factors can cause the mark price and last price to diverge in the cryptocurrency market?

3 answers

• Nov 25, 2021 · 3 years ago
  The mark price and last price can diverge in the cryptocurrency market due to a variety of factors. One common reason is the presence of market manipulation. Some traders may artificially inflate or deflate the mark price to create a false impression of market conditions. This can lead to a discrepancy between the mark price, which is determined by the exchange, and the last price, which is the actual price at which the last trade occurred. Another factor that can cause the mark price and last price to diverge is the difference in liquidity between the buy and sell orders. If there are more buy orders than sell orders, the mark price may be higher than the last price. Conversely, if there are more sell orders than buy orders, the mark price may be lower than the last price. Additionally, external events such as news announcements or regulatory changes can also impact the mark price and last price. Positive news can drive up the mark price, while negative news can cause it to drop. However, the last price may not immediately reflect these changes, leading to a divergence between the two. Overall, the mark price and last price can diverge in the cryptocurrency market due to market manipulation, differences in liquidity, and external events.
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• Nov 25, 2021 · 3 years ago
  The mark price and last price in the cryptocurrency market can diverge for several reasons. One possible factor is the presence of high-frequency trading algorithms. These algorithms can execute trades at a rapid pace, causing the mark price to fluctuate more frequently than the last price. As a result, there may be a time lag between the mark price and last price, leading to a divergence. Another factor that can cause the mark price and last price to diverge is the presence of large buy or sell orders. If a large buy order is executed at a price higher than the last price, it can push up the mark price. Similarly, a large sell order executed at a price lower than the last price can cause the mark price to drop. Furthermore, differences in trading volume between different exchanges can also contribute to the divergence between the mark price and last price. If one exchange has significantly higher trading volume than others, its mark price may be more accurate and reflect the true market conditions, while the last price on other exchanges may lag behind. In conclusion, the mark price and last price can diverge in the cryptocurrency market due to high-frequency trading algorithms, large buy or sell orders, and differences in trading volume between exchanges.
  1280427
• Nov 25, 2021 · 3 years ago
  In the cryptocurrency market, the mark price and last price can diverge due to various factors. One factor is the presence of arbitrage opportunities. Traders may take advantage of price discrepancies between different exchanges to make profits. This can lead to a difference between the mark price, which is based on the exchange's calculation, and the last price, which represents the actual transaction price. Another factor that can cause the mark price and last price to diverge is the impact of market sentiment. If there is a sudden change in market sentiment, such as a wave of buying or selling pressure, it can cause the mark price to deviate from the last price. Traders may react to the change in sentiment at different speeds, leading to a discrepancy between the two prices. Moreover, the presence of large spreads between the bid and ask prices can also contribute to the divergence between the mark price and last price. If the spread is wide, it means there is a significant difference between the highest price buyers are willing to pay and the lowest price sellers are willing to accept. This can result in a difference between the mark price and last price. To summarize, the mark price and last price can diverge in the cryptocurrency market due to arbitrage opportunities, changes in market sentiment, and large spreads between bid and ask prices.
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