#Liquidity101

Liquidity refers to how easily an asset can be bought or sold without affecting its price. High liquidity ensures smooth, fast trades with minimal slippage, essential for active traders. Low liquidity can cause price spikes and difficulty in executing large orders. It’s influenced by trading volume, market depth, and the number of buyers and sellers. Major trading pairs like BTC/USDT typically have high liquidity, making them more stable and cost-efficient. Traders should prioritize liquid markets to reduce risk and improve execution quality, especially when using large capital or trading in volatile conditions.