The Importance of Liquidity in Pools
Many people only look at a project's market cap and forget to consider liquidity. And this is a mistake that costs money.
If a coin has a market cap of 1 million but only 10 thousand in liquidity... that's practically a trap. A whale can sell and drop the price by 30%, 50%, or even more... and who ends up holding the bag is you.
That's why there is a simple rule that every serious investor should follow:
Healthy liquidity = memecoins usually have between 5 to 10% of the market cap and blue chips between 10% to 30% (large coins like SOL, BTC, etc...)
If the memecoin has a market cap of 1 million, the ideal is to have at least 50 thousand in liquidity in the pool.
The lower the liquidity compared to the market cap, the higher the risk of manipulation and dumping.
If it has less than that, it's a warning sign.
Easy to manipulate.
Easy to pump & dump.
Any large sale can crash everything.
Low liquidity poses a risk of rapid devaluation, absurd slippage, and difficulty even getting out of the position.
Before looking at whether "the coin is cheap", check if you can exit it later without taking a loss just on the sale.
Liquidity is safety. Market cap is an illusion if there is no liquidity.
