#Liquidity101

What is liquidity and why is it crucial in trading?

Liquidity refers to the ease with which an asset can be bought or sold without significantly affecting its price. In cryptocurrencies, a liquid market allows for quick execution of trades, with less slippage and greater accuracy.

For example, pairs like BTC/USDT have high liquidity, which benefits traders who need to enter or exit the market at key moments. On the other hand, tokens with low liquidity can exhibit extreme volatility, making it difficult to have a clear strategy.

Before trading, evaluate the daily volume and the spread. Good liquidity management can make the difference between a successful entry and an unexpected loss.

#Liquidity101