Here is a simple explanation of the concept of liquidity without complications.
I will give an example:
If the price of the currency = 1850 and the liquidity volume = 100, then the currency will rise and the price of the currency will become = 4500, and investors will take their profits along this rise with variation, and the liquidity volume will become = 30. This means that liquidity is weak and the price should drop because there is no money. In this case, you will find investors placing buy orders at a certain point, which may be around the previous price, to return the chart to take this liquidity forcibly unless some large investors intervene with direct entry and force the market to rise. Therefore, liquidity must be monitored continuously.
As shown in the image.
If you have completed reading, support me with a like and a comment and follow me.
And don't forget to visit my page regularly for more benefits.
#BinanceAlphaPoints
#TariffPause
#BinanceHODLerSIGN
#BTCvsMarkets
