#Liquidity101

Crypto liquidity refers to how easily a cryptocurrency can be bought or sold without significantly impacting its market price. Here's a breakdown:

*Factors affecting crypto liquidity:*

1. *Trading volume*: Higher trading volumes usually mean more liquidity.

2. *Market capitalization*: Larger market caps often indicate more liquidity.

3. *Exchange listings*: Being listed on multiple exchanges can increase liquidity.

4. *Order book depth*: A deep order book with many buy and sell orders indicates more liquidity.

*High liquidity cryptos:*

- Bitcoin (BTC)

- Ethereum (ETH)

- Tether (USDT)

*Low liquidity cryptos:*

- Some altcoins or newer tokens with low market caps and trading volumes.

*Risks of low liquidity:*

- Price volatility

- Difficulty buying or selling quickly

- Potential for price manipulation