#Liquidity101
📊 Liquidity is one of the most important concepts in the world of trading. It simply refers to how easily an asset can be bought or sold without causing major price fluctuations. Highly liquid markets, like major currency pairs (such as BTC/USDT), allow traders to enter and exit positions quickly and efficiently. In contrast, low-liquidity markets often have large spreads that can eat into profits. Liquidity matters to both traders and investors because it affects the ability to execute orders effectively. In the crypto world, decentralized exchanges (DEXs) often face challenges in providing high liquidity compared to centralized ones (CEXs). That’s why liquidity plays a key role in any trading strategy.
