KRYPTOKURRENCY
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#Liquidity101
Liquidity refers to how easily an asset (e.g., a cryptocurrency like BTC or USDC) can be bought or sold in a market without significantly affecting its price. High liquidity means large orders can be executed quickly with minimal price impact, while low liquidity can lead to price slippage and higher costs.
A trading pair (e.g., BTC/USDC) is considered liquid if it has a high trading volume and tight bid-ask spreads (the difference between the highest buy and lowest sell prices).On Binance, pairs like BTC/USDC or ETH/USDT are highly liquid due to frequent trading and large order books. For example, BTC/USDC often has a 24-hour trading volume exceeding $500 million, ensuring smooth trades.Less popular pairs, like those involving smaller altcoins (e.g., SHIB/BTC), may have lower liquidity, leading to wider spreads and higher price volatility.
Liquidity refers to how easily an asset (e.g., a cryptocurrency like BTC or USDC) can be bought or sold in a market without significantly affecting its price. High liquidity means large orders can be executed quickly with minimal price impact, while low liquidity can lead to price slippage and higher costs.
A trading pair (e.g., BTC/USDC) is considered liquid if it has a high trading volume and tight bid-ask spreads (the difference between the highest buy and lowest sell prices).On Binance, pairs like BTC/USDC or ETH/USDT are highly liquid due to frequent trading and large order books. For example, BTC/USDC often has a 24-hour trading volume exceeding $500 million, ensuring smooth trades.Less popular pairs, like those involving smaller altcoins (e.g., SHIB/BTC), may have lower liquidity, leading to wider spreads and higher price volatility.
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