#Liquidity101

#Liquidity101: Liquidity refers to how easily an asset can be bought or sold without impacting its price. In crypto, high liquidity means tight spreads, faster trades, and better price stability. Popular pairs like BTC/USDT have deep liquidity, while low-cap tokens may suffer from slippage and volatility. Exchanges with strong liquidity offer smoother trading experiences and reduced risk. Factors affecting liquidity include trading volume, number of market participants, and exchange reputation. Always assess a token’s liquidity before investing or trading—illiquid assets can trap funds and delay exits. In essence, liquidity is the lifeblood of markets—without it, prices stall and risk rises.