#Liquidity101 Liquidity 101

Liquidity refers to how easily an asset can be bought or sold in the market without affecting its price. High liquidity means there are many buyers and sellers, allowing quick trades at stable prices—common in markets like major cryptocurrencies or stocks. Low liquidity, on the other hand, can cause price slippage and delays in order execution due to fewer participants. In crypto, liquidity is often provided by centralized exchanges or decentralized liquidity pools. Traders prefer high-liquidity markets for better pricing and minimal volatility. Liquidity also reflects the overall health of a market—more liquidity usually means more trust, stability, and trading opportunities.