#Liquidity101 🚀 **Liquidity 101: Understanding Market Fluidity** 🚀

Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price. A **highly liquid market** has many buyers and sellers, ensuring smooth transactions, while a **low liquidity market** can lead to price volatility and delays.

#### 🔥 **Key Factors Affecting Liquidity**

- **Trading Volume**: Higher volume means better liquidity.

- **Market Depth**: More buy/sell orders create stability.

- **Bid-Ask Spread**: Narrow spreads indicate strong liquidity.

- **Institutional Participation**: Large investors enhance market fluidity.

Understanding liquidity helps traders make informed decisions and avoid unnecessary risks. 🚀