Liquidity in cryptocurrency refers to how easily and quickly you can buy or sell a digital asset without causing significant changes to its price. High liquidity means there are many buyers and sellers, so trades happen fast and at stable prices, reducing risks like slippage and volatility. This makes entering or exiting positions easier and more efficient for traders and investors.
Factors that influence liquidity include trading volume, market sentiment, regulatory environment, technological advancements, and the overall adoption of crypto assets. High liquidity supports market stability, efficient trading, and fair pricing.
