Glossary
Market Depth
The size of resting orders at each price level on a market — a measure of how much trading a venue can absorb without significant price impact.
Market depth answers: how much can I trade before moving the price by N basis points? A deep market has large resting orders close to the spread; a shallow market shows thin liquidity that big trades will sweep through.
On a CEX, market depth is read directly off the order book. On an AMM, "depth" is a derived quantity computed from the curve and the pool size at the relevant price range. Concentrated liquidity v3-style AMMs can show extremely deep effective markets near the spot price and very thin depth a few ticks out.