When a girl wants you to give her a nickname?

So I've been texting this girl for the past 6 months and we've been getting along pretty good. We've never seen each other in person but know what we each look like via pics. Everyday we ask each other how were our days and stuff, tease each other and their was this one day when she told me about her personal stuff and how hopeless she felt about life and her studies. I reassured her by giving a long touchy text in which she responded that it was sweet and "gave her more hope :)".

After talking a bit more, I told her i was off to bed and out of nowhere she said "Good night baby, Love you < 3 " I lol ' d and she texted again saying "are you blushing :p " and i was like no of course not. She said again "Haha that's cute :P "

That was a really weird moment and later I asked her why she called me "baby" because it was the first time someone said that to me. She responded by saying "Euh nothing special ^^ it's just a cute nickname :)" and "So I'm the first one to call you that :)".

After that she wanted a nickname from me. I told her I'm not good at giving nicknames and she said she didn't care because it will be "new and original" for her. I called her "kitty" and she loved it regardless lol.

She's giving me mixed signals. Is she being friendly or is their something else? I'm not good at text interpretations but this had me wondering.
When a girl wants you to give her a nickname?
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