#Liquidity101

Understanding Liquidity in the Crypto Market

Today, liquidity remains an extremely important factor for every cryptocurrency trader. Simply put, liquidity is the ability to buy or sell an asset without causing a significant change in its price. A market with high liquidity means there are many buyers and sellers, facilitating quick trades and low spreads.

Conversely, a market with low liquidity can lead to large slippage and difficulty exiting positions when needed. When participating in the market, always check the trading volume and order book depth to assess the liquidity of the asset you are interested in. This is especially important during volatile market times to avoid getting stuck.