#Liquidity101

🔹 1. What is liquidity?

Liquidity refers to how easily and quickly you can buy or sell a particular crypto (or any other asset) without significant changes in price.

👉 High liquidity = easy trading, small difference between buying and selling price (the so-called spread)

👉 Low liquidity = hard to find a buyer/seller, price easily jumps or falls

🔹 2. Why is liquidity important?

✔️ Lower risk of sudden price movements

✔️ Faster order execution

✔️ More stable market

✔️ Better prices for entering and exiting positions

🔹 3. Where to check liquidity?

On CEX exchanges – look at trading volume and market depth for a specific pair (e.g., BTC/USDT).

On DEX platforms – check TVL (Total Value Locked) and the size of the liquidity pool (e.g., on Uniswap).

🔹 4. What is a “liquidity pool”?

On DEXs, liquidity is provided by users who lock their tokens in so-called liquidity pools. Without these pools – there is no trading!

💡 There is no good trading without good liquidity. Always check before you enter lesser-known tokens or new projects.

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