#Liquidity101

Liquidity is an indicator of how easily and quickly cryptocurrency can be bought or sold at a stable, fair market price without causing significant fluctuations in that price.

Why is liquidity important on a cryptocurrency exchange?

Smooth transactions, price stability, reduced slippage, fair market price, reduced risks, attractiveness for investors. Liquidity is an indicator of the health of a cryptocurrency exchange.

Summary:

To determine the liquidity of a specific cryptocurrency pair on the exchange, you need to:

* Look at the trading volume: The higher, the better.

* Assess the spread: The smaller the difference between the buying and selling price, the better.

* Check the market depth (order book): The more orders with large volumes at different levels, the better.

These three main indicators will allow you to accurately assess the liquidity of the asset and make an informed trading decision.