#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 lower slippage. It’s essential for stable prices and efficient markets. Coins with strong liquidity—like BTC or ETH—attract more traders and reduce volatility. Liquidity also boosts confidence for institutions and retail investors alike. Whether you’re day trading or holding long-term, understanding liquidity helps you enter and exit positions smoothly.
💡Tip: Always check volume and order book depth before trading.
