#Liquidity101

Liquidity: It is the ease of buying or selling a cryptocurrency at a fair price.

Much liquidity = Easy and good price. (Like a crowded market).

Little liquidity = Difficult and bad price (slippage). (Like an empty store).

How to know if there is liquidity?

Volume: Is there a lot of buying and selling? (Yes = good).

Order book: Are there many buy and sell offers at close prices? (Yes = good).

Spread (buy/sell difference): Is the difference small? (Yes = good).

How to avoid overpaying (slippage)?

Use limit orders: You specify the exact price you want to pay/receive.

Split your large orders: Break them into smaller pieces.

Avoid trading during times of low activity or high volatility.