Liquidity is the ease of buying or selling an asset without moving the price much. Two pillars: **volume** and **market depth**.
• High volume indicates many active traders — smaller spreads and fast execution.
• Deep book shows large-scale orders on both sides; it protects against large fluctuations.
Low liquidity generates slippage: you want to pay 0.20 USDT, but after the order, the price jumps to 0.205 USDT. In small altcoins, this "invisible tax" destroys profit.
Use metrics like "24h volume / market cap" and check the spread between the best offers. Solid liquidity is as crucial as a good technical setup.
