#Liquidity101 Liquidity refers to how easily and quickly an asset can be bought or sold in the market without causing a major change in its price. Highly liquid assets, like major stocks or popular cryptocurrencies, have plenty of buyers and sellers, allowing trades to happen smoothly with tight bid-ask spreads. On the other hand, low-liquidity assets, such as obscure tokens or small-cap stocks, can be harder to trade without impacting the price significantly. Liquidity matters because it affects how fast you can enter or exit a position — and at what cost. Before placing a trade, smart traders always check the trading volume, order book depth, and spread to understand how liquid the market really is. In simple terms: more liquidity means more control.