#Liquidity101

Why Liquidity Matters in Crypto Trading 🔄📊

Ever wondered why some trades execute instantly, while others slip or fail? The answer lies in liquidity.

🔹 What is Liquidity?

Liquidity refers to how easily an asset can be bought or sold without causing major price changes. High liquidity = faster, smoother trades.

🔸 Why It Matters:

✔️ Tighter spreads – The difference between buy and sell prices is small

✔️ Better execution – Orders fill at expected prices

✔️ Lower slippage – Less deviation between your order price and actual fill

✔️ Market stability – High liquidity reduces extreme price swings

📉 Low liquidity can lead to:

❗ Delayed trades

❗ Higher volatility

❗ Poor fill prices — especially for large orders

🔁 Where to find high liquidity?

Centralized exchanges (CEXs) often have deeper order books, while newer tokens on DEXs might have less liquidity.

💡 Tip: Always check trading volume and order book depth before entering a position!