#Liquidity101

Liquidity refers to how easily a cryptocurrency can be bought or sold without causing a significant change in its price. It plays a crucial role in the stability and efficiency of the crypto market. High liquidity means there are many buyers and sellers, which allows for quicker transactions, tighter bid-ask spreads, and less price volatility. This creates a more favorable trading environment and attracts institutional investors. On the other hand, low liquidity can lead to price slippage, larger spreads, and increased market manipulation. Overall, strong liquidity is essential for a healthy, stable, and trustworthy crypto ecosystem.