#Liquidity101 Liquidity in crypto (and finance) refers to how quickly and easily an asset can be bought or sold without significantly affecting its price. High liquidity means there's a large number of buyers and sellers, so trades happen fast and at stable prices. For example, Bitcoin has high liquidity because it's widely traded.
Low liquidity means fewer market participants, leading to slippage — where your buy or sell order affects the price. This is common with smaller or newer tokens.
Why it matters:
✅ Easier entries and exits
✅ Lower risk of price swings
✅ Better for active traders
In short: More liquidity = safer, smoother trading.
