#Liquidity101 Understanding Liquidity in Crypto Markets

Have you ever tried to sell an asset and found no buyers? That's liquidity (or the lack of it)! Today I'll explain why it's key in your trades:

What is liquidity?

It is the ease with which an asset can be bought/sold without significantly affecting its price. The higher the liquidity:

✅ Tighter spreads (the difference between buy/sell price)

✅ Faster order execution

✅ Lower volatility for large trades

Where to find it:

• CEXs like Binance → High volumes = better liquidity

• DEXs → Depends on the liquidity pool (e.g. Uniswap)

• Popular pairs (BTC/USDT > BTC/ETH)

Risks of low liquidity:

⚠️ High slippage (execution at worse price)

⚠️ Unfilled orders

⚠️ Greater price manipulation

Tips for traders:

1️⃣ Prioritize pairs with high volume