#Liquidity101 : Liquidity in crypto, the fuel for your trades!

Alright, folks, if you're into the cryptocurrency scene, there's one word you absolutely need to understand: liquidity. It's not a fancy word to show off; it's the key to making your trades go the way you want!

Imagine you want to buy or sell a cryptocurrency. Have you ever found yourself asking for a price and ending up buying/selling at a much worse one? Or that your order takes forever to execute? Well, that's because the liquidity was low.

What is liquidity, in simple terms?

Think of the market like a fair. If there are lots of people buying and selling the same thing (lots of "arepas" stands and many people wanting to buy them), it’s super easy to buy your arepas at the price you want and get them instantly. There’s a lot of "flow".

But if there’s only one arepa stand and nobody else is buying or selling, if you want one, the vendor can ask whatever they want, or if you want to sell yours, no one will buy them quickly. That’s low liquidity!

In the crypto world, liquidity refers to how easy and fast you can buy or sell an asset (a cryptocurrency) without the price moving much because of your operation.

And why does liquidity matter to you? A lot!

When liquidity is low, things can happen that you won’t like:

* Slippage: This is the number one headache. If you want to buy Bitcoin at $60,000, but liquidity is bad, your order can "slip" and you end up buying at $60,100 or more. Money that slips away! The same goes for selling.

* Unfavorable prices: You simply can’t find anyone to buy or sell at the price you consider fair, and you have to accept a worse one.

* Failed trades or trades that take forever: Your order just sits there, waiting, waiting, and doesn’t execute. Imagine if you need to sell quickly in a drop and there’s no liquidity. Drama!

It gets worse during times of volatility, that is, when the market is like a roller coaster.

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