Liquidity is a key element in financial markets, referring to how easily a financial asset can be bought or sold without significantly affecting its price. The greater the liquidity, the faster orders can be executed and at fair prices. High liquidity cryptocurrencies like BTC and ETH tend to be more stable and less prone to sharp fluctuations.
Centralized platforms provide greater liquidity due to a large number of users, while decentralized platforms rely on liquidity pools created by the users themselves. Good liquidity means better opportunities for traders!