In crypto, liquidity is a crucial factor. Simply put, liquidity is the ability to buy and sell quickly without causing significant price fluctuations.

For example: If you want to sell 1,000 USDT – if that coin has high liquidity, you sell it right away without slippage. But if the coin has low liquidity, selling one order might cause the price to drop drastically because... there’s no one to buy it in time!

High liquidity = many buyers and sellers = less risk.

Low liquidity = easy to get 'stuck with inventory' or face unfavorable prices.