#Liquidity101

Liquidity refers to how easily an asset can be bought or sold without affecting its price. High liquidity means tight spreads and fast execution—ideal for traders. Low liquidity can lead to slippage and higher volatility, which increases risk. Bitcoin and Ethereum are highly liquid, while small-cap altcoins often suffer from poor liquidity. Before trading any asset, I check its order book and volume. If liquidity is low, I reduce my position size or avoid it altogether. Smart traders always consider liquidity when planning entries and exits. #Liquidity101