In financial markets, price impact is a crucial concept that signifies how large buy or sell orders can alter the current market price of a cryptocurrency or token. For instance, if a trader wants to buy a significant amount of a low-liquidity cryptocurrency, this could push the price higher due to increased demand, resulting in a larger average price paid than the market price before the order was placed. Conversely, a large sell order can lead to a decrease in price, as the sudden increase in supply may not be met with sufficient buyer interest. Price impact is particularly relevant in crypto trading where market depth may be shallow and trading volumes may not be as high as in traditional equity markets.