💧 What is cryptocurrency liquidity and why is it important?
Liquidity is the ability of a cryptocurrency to be quickly bought or sold without significant changes in price.
🔹 High liquidity
✅ Less slippage
✅ Narrow spread
✅ Easier to enter and exit trades
💡 Example: BTC, ETH on major exchanges
🔸 Low liquidity
⛔️ Difficult to find a counterparty
⛔️ Sharp price jumps
💡 Example: obscure tokens on DEX
📊 How to use in analysis?
✔️ Look at trading volumes — more volume = higher liquidity
✔️ Analyze the order book
✔️ Consider liquidity when choosing an asset for trading or investments
💡 Conclusion: liquidity = stability. Before a trade, check how "liquid" the asset is.
