#Liquidity101 Why It Matters More Than You Think
In crypto trading, liquidity isn't just a buzzword — it's a critical factor that determines how easily and efficiently you can enter or exit a trade. Understanding liquidity can save you from costly slippage, poor execution, or even missed opportunities in fast-moving markets.
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🧠 What is Liquidity?
Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price.
More buyers + sellers = Higher liquidity = Smoother execution.
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📊 How Liquidity Affects Price Execution:
High liquidity = tighter bid-ask spreads, minimal slippage
Low liquidity = wider spreads, large slippage, delayed execution
In volatile markets, low liquidity can make or break your trade