Liquidity in trading refers to how easily an asset can be bought or sold without affecting its price. High liquidity means there are many buyers and sellers, which allows for faster and smoother transactions, tighter spreads, and more stable prices. In contrast, low liquidity can cause price slippage, delays, and even failed trades. Liquidity is important for all markets, but especially for volatile ones like crypto. Traders and investors often prefer high-liquidity assets because they are more reliable for entry and exit. It's one of the most overlooked but crucial factors in trading success.
