#Liquidity101 Liquidity measures how easily an asset can be bought or sold without affecting its price. High liquidity (e.g., BTC/USD) means tight spreads and fast execution, while low liquidity can lead to slippage and delays. Key indicators include trading volume and order book depth. Liquidity matters because it reduces transaction costs and improves price stability. Centralized exchanges (CEXs) often offer better liquidity than decentralized ones (DEXs), but DEXs are catching up with innovations like automated market makers (AMMs). For traders, prioritizing liquid assets minimizes risks and ensures smoother trades. Remember: liquidity = efficiency!