whatisliquidity

Day 7 of 100: What Is Liquidity in Crypto Trading?

Welcome to Day 7 of my Binance journey!

Today, let's talk about a super important concept: Liquidity.

What is Liquidity?
Liquidity refers to how easily you can buy or sell a crypto asset without causing big changes in its price. High liquidity means there are many buyers and sellers, so trades happen quickly and at stable prices.

Why Liquidity Matters:

Faster Trades: More buyers/sellers means your order gets filled quickly.

Stable Prices: Less slippage (price change between placing and executing your order).

Less Risk: You’re less likely to be “stuck” holding an asset you can’t sell.

Example:
BTC has high liquidity—you can easily trade it any time. But a lesser-known coin might have low liquidity, causing delays or worse trade prices.

Pro Tip: Always check the 24h Volume of a trading pair before entering a trade—it’s a good clue to its liquidity.

Tomorrow on Day 8: We’ll explore Market Depth and Order Book Basics.

#Hundreddaysofbinance #whatisliquidity