🔍 Deepening the Fundamentals of Crypto Trading

📘 Topic 4: #Liquidity101

💧 Liquidity is one of the most underestimated but crucial factors in any trade. It directly affects how and at what price your trade is executed.

🔎 What is liquidity?

It is the ease with which you can buy or sell an asset without significantly affecting its price.

✅ High liquidity = lower spreads, fast execution

❌ Low liquidity = slippage, incomplete orders, higher volatility

📊 How do I assess liquidity before trading?

1. Trading volume (24h)

2. Depth of the order book

3. Size of the spread between buy and sell

⚠️ Low liquidity risk:

A token with low volume may seem profitable, but in practice, it can be difficult to exit without losing capital.

🎯 Strategies to reduce slippage:

• Use limit orders instead of market orders

• Trade during high volume hours

• Split large trades into smaller blocks

• Prefer CEX or pairs with good depth

$BTC