Liquidity in the cryptocurrency market means:

> The ease of buying or selling a cryptocurrency without significantly affecting its price.

Simplified explanation:

If the cryptocurrency has high liquidity:

You can buy or sell large amounts of it quickly, at a price close to the current market price (the smallest difference between the buying and selling price - the spread).

If the cryptocurrency has low liquidity:

It is difficult to execute buy or sell orders quickly or at a suitable price, and the price may change significantly during any large trading activity.

Liquidity indicators:

Daily trading volume (Volume): The higher it is, the greater the liquidity.

The number of users or active traders in the cryptocurrency.

The number of markets (exchanges) where the cryptocurrency is traded.

Why is liquidity important?

Reduce risk.

Faster execution of buy and sell orders.

Low spread (the price difference between buying and selling).