#Write2Earn
WHAT is LiQuIdItY
🔍 Key Aspects of Liquidity:
Trading Volume
High volume = high liquidity.
If lots of people are trading a coin, it's easier to buy/sell at stable prices.
Bid-Ask Spread
This is the difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller will accept (ask).
A small spread usually indicates high liquidity.
Market Depth
The number of buy and sell orders at various prices.
A deeper market = more liquidity = less price slippage.
🟢 High Liquidity =
Fast and easy trades
More stable prices
Less price manipulation
Better for large investors ("whales")
🔴 Low Liquidity =
Harder to enter or exit positions
Bigger price swings
Higher slippage
Greater risk of manipulation
🪙 Example:
Bitcoin (BTC) and Ethereum (ETH) have high liquidity due to high trading volume and presence on many exchanges.
A small altcoin with low volume might have poor liquidity, making it riskier to trade.
