Day 7 of 100: What Is Liquidity in Crypto Trading?
Welcome to Day 7 of my Binance journey!
Today, let's talk about a super important concept: Liquidity.
What is Liquidity?
Liquidity refers to how easily you can buy or sell a crypto asset without causing big changes in its price. High liquidity means there are many buyers and sellers, so trades happen quickly and at stable prices.
Why Liquidity Matters:
Faster Trades: More buyers/sellers means your order gets filled quickly.
Stable Prices: Less slippage (price change between placing and executing your order).
Less Risk: You’re less likely to be “stuck” holding an asset you can’t sell.
Example:
BTC has high liquidity—you can easily trade it any time. But a lesser-known coin might have low liquidity, causing delays or worse trade prices.
Pro Tip: Always check the 24h Volume of a trading pair before entering a trade—it’s a good clue to its liquidity.
Tomorrow on Day 8: We’ll explore Market Depth and Order Book Basics.
