#Liquidity101
The ease with which a digital token can be converted into a digital asset or cash without affecting its price is referred to as liquidity in cryptocurrency.
Liquidity in cryptocurrency reduces investment risk and, more importantly, aids in the development of an exit strategy, making it easier to sell your holdings.
Liquidity in cryptocurrency allows for price stability and decreased volatility, as well as assists in the analysis of trader activity.
Importance of Liquidity in Cryptocurrency
The cryptocurrency market is dependent on liquidity. Liquidity in cryptocurrency lowers investment risk and, more crucially, assists in defining your exit strategy, making it simple to sell your ownership. As a result, liquid crypto markets are preferred by investors and traders.
