#Liquidity101 Things to know before entering a crypto trading pair
The liquidity of a trading pair represents how easily you can buy or sell without experiencing significant slippage.
Why it’s important:
Reduced slippage: greater liquidity = execution closer to the desired price.
Tighter spreads: less difference between the buy and sell price.
Quick orders: trades execute quickly, even with high volumes.
How to assess it:
24h volume of the pair
Order book depth
Number of active traders
Presence on primary exchanges (CEX or DEX)
Caution: exotic pairs or those on smaller DEXs may seem interesting, but often have low liquidity and high risk.