#Liquidity101 Why Liquidity Matters in Crypto Trading

Liquidity is how easily you can buy or sell an asset without affecting its price. High liquidity means trades execute quickly at expected prices with tight spreads. Low liquidity can cause slippage—where your trade fills at a worse price—or even failed orders during volatility.

Before trading, check trading volume, order book depth, and bid-ask spreads to assess liquidity. To reduce slippage, use limit orders, trade during peak hours, and avoid placing large orders in low-volume markets.

Understanding liquidity helps you trade smarter and protect your capital.