#Liquidity101
What is liquidity in the world of crypto?
Liquidity is simply how easy it is to buy or sell a cryptocurrency without significantly affecting the price.
When liquidity is high:
You can enter and exit trades quickly
It reduces the bid-ask spread when you open or close your position
It protects you from price slippage
Key tips to increase the liquidity of your wallet and the platform you trade on:
1. Always choose major pairs (like BTC/USDT or ETH/USDT), as they are the most traded 🔄
2. Participate in liquidity pools on your platform and earn fee rewards 📈
3. Monitor daily trading volume: the higher the volume, the better the liquidity 👀
4. Use limit orders instead of market orders to have more control over the price 🎯
5. Keep an eye on peak trading times when liquidity is at its highest (usually after significant news releases or economic data)
