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#algorithms2#economic-impact5#liquidity10
Liquidity providers anticipate large order flow and adjust prices, creating a feedback loop that accelerates moves
  • As a large trader buys, liquidity providers raise prices in anticipation of continued buying pressure.
  • This creates an “iceberg” effect: the market moves faster than the original order would suggest because other participants react.
  • Nang describes this as a market‑impact function where each additional share bought pushes the price further, leading to rapid acceleration.
  • The loop ends when liquidity dries up, causing a sharp reversal.
Rishi NangTitans Of Tomorrow01:07:53

Supporting quotes

Quote
01:07:53
“The more that you are selling, the more price starts to accelerate in that direction because you're going through all the natural buyers then you're into the market makers.” — Rishi Nang
Quote
01:07:55
“The more that you are selling, the more price starts to accelerate in that direction because you're going through all the natural buyers then you're into the market makers.” — Rishi Nang

From this concept

Market Impact & Liquidity Mechanics

Nang details how large orders move prices, the role of VWAP algorithms, and why the "iceberg" effect creates self-reinforcing price moves.

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