📢 The market doesn’t care about your TA if you can’t exit your trade.
Liquidity is the most underrated factor in crypto — until you're stuck in a position and every sell order eats into the price. Let’s break down #Liquidity101 in a way that actually helps you trade better 👇
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🔹 What Is Liquidity?
Liquidity refers to how easily an asset can be converted into cash without major price impact. High liquidity = fast trades with low slippage. Low liquidity = dangerous exits, wider spreads, and poor fills.
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🔹 Types of Liquidity
• Market Liquidity: How easy it is to buy/sell a coin in the open market. BTC has deep liquidity. Microcaps? Not so much.
• Accounting Liquidity: For businesses, it’s their ability to cover short-term obligations — not relevant unless you’re analyzing project treasuries.
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🔹 Why It Matters for Traders
• Tight spreads mean lower costs.
• Deep order books reduce slippage.
• High volume means you can scale your trades.
Before entering a position, always check liquidity. TA without liquidity = trap.
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🔹 How To Check Liquidity
Use tools like:
Order Book Depth: Are there enough buyers/sellers at each level?
24h Volume: Thin volume = risky trade.
Bid/Ask Spread: Wider spread = less liquidity.
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🔹 Final Tip
Never ignore liquidity. You can predict price correctly and still lose money if you can’t exit. Your strategy is only as good as your liquidity awareness.
