#Liquidity101

📘 #Liquidity101 – Concept of Liquidity in the Market

Liquidity is the ability of an asset to be converted into cash quickly and without a significant impact on the price. In the crypto world, high liquidity means:

✅ Fast execution of buy and sell orders

✅ Low spread (the difference between the bid and ask price)

✅ Less volatility when large amounts of money enter or exit

Why does it matter to traders?

The higher the liquidity, the greater your chances of entering and exiting trades smoothly, without painful slippage. On the other hand, low liquidity means greater risk, especially in smaller markets or low-volume currencies.

📊 Tip: Monitor daily trading volume and Order Book Depth before entering any trade.