#Liquidity101
Liquidity in crypto refers to how easily an asset can be bought or sold without affecting its price. High liquidity means there are plenty of buyers and sellers, making trades faster and prices more stable—common in major coins like Bitcoin or Ethereum. Low liquidity can cause price slippage and make it hard to exit positions, often seen in small-cap or new tokens. Liquidity is crucial for smooth trading, especially during market volatility. Always check a coin’s trading volume and liquidity before investing. A liquid market protects your capital, while an illiquid one can trap you. Smart trading starts with liquidity awareness.