#Liquidity101 Liquidity 101: The Lifeblood of Trading

Liquidity refers to how easily an asset can be bought or sold without affecting its price. High liquidity means more buyers and sellers, tighter spreads, and faster trades—ideal for smooth, efficient trading. Popular cryptocurrencies like Bitcoin and Ethereum are highly liquid. Low liquidity means fewer market participants, bigger price swings, and slippage, which can hurt your profits. Centralized exchanges usually offer higher liquidity than decentralized ones. Liquidity matters because it affects your ability to enter or exit trades quickly. Whether you're day trading or investing long-term, always consider liquidity before making a move in the market.