#Liquidity101

💧 The Power of Liquidity in Crypto Trading: What You Need to Know

Liquidity is one of the most underrated forces in crypto trading — and it can make or break your strategy.

🔍 What is liquidity?

In simple terms, it’s how easily you can buy or sell a crypto asset without drastically changing its price. High liquidity means smoother trade execution, tighter spreads, and lower slippage. Low liquidity? Expect delays, price jumps, and frustration.

📊 How do you evaluate liquidity before entering a trade?

Here’s what smart traders watch for:

• 24h trading volume – The higher, the better.

• Order book depth – Look for substantial bids/asks near market price.

• Spread width – A small spread usually signals a healthy, liquid market.

🛠️ Tips to reduce slippage:

1. Use limit orders instead of market orders.

2. Trade in highly liquid pairs like BTC/USDT or ETH/FDUSD.

3. Split large positions into smaller trades.

4. Avoid low-volume hours and trade during peak sessions.