#Liquidity101 means how easily and quickly you can buy or sell a digital asset without significantly affecting its price. High liquidity indicates a healthy market with many buyers and sellers, leading to stable prices and tighter bid-ask spreads (the difference between buying and selling prices).#Liquidations #liquidity

Conversely, low liquidity can cause extreme price volatility and "slippage," where your trade executes at a worse price than expected. Factors like trading volume, market depth (number of orders), and the number of participants all contribute to a cryptocurrency's liquidity, making it a crucial concept for traders and investors alike.

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