Order Book Resilience
Order book resilience is the speed and capacity at which a market recovers its depth after a large trade has been executed. A resilient market sees new limit orders quickly populate the order book following a price-impacting event, effectively stabilizing the price discovery process.
This is a vital metric for assessing the health of decentralized exchanges and high-frequency trading venues. High resilience indicates that market participants, particularly market makers, are confident in the asset's value and are willing to provide liquidity even after volatility.
Low resilience suggests a lack of participant confidence or technical bottlenecks in order submission. Monitoring resilience allows traders to gauge the structural integrity of a market during periods of high stress or sudden market movements.