#CEXvsDEX101 Liquidity in Crypto Trading: Why It Matters 💧

#Liquidity101

Liquidity is the lifeblood of crypto trading 🩸. It refers to how quickly and easily you can buy or sell an asset without causing a significant price change 📉📈.

High liquidity means tighter spreads, faster trade execution, and less slippage — every trader’s dream 🚀.

🔍 Before I enter a position, I always check:

1️⃣ 24-hour trading volume – Higher volume = more liquidity.

2️⃣ Order book depth – A thick order book signals strong buyer/seller interest.

3️⃣ Bid-ask spread – A narrow spread shows a liquid market.

4️⃣ Exchange reputation – Liquidity varies across platforms!