#Liquidity101 : Why It Matters in Crypto Trading

Liquidity is one of the most important yet often overlooked concepts in crypto trading. At its core, liquidity refers to how easily an asset can be bought or sold without significantly impacting its price. Highly liquid markets, like those for #BTC or #ETH, have many buyers and sellers, allowing for faster trades and tighter spreads.

Low liquidity can lead to high slippage, meaning your trade executes at a worse price than expected. This is especially risky in volatile altcoin markets or on low-volume tokens.

Liquidity also reflects a token’s health and adoption. Institutional investors and large traders seek assets with high liquidity to minimize risk.

Whether you're on a CEX or DEX, always check liquidity before trading. It could save you money and reduce risk.

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