💧 #Liquidity101 – Why It Matters in Crypto Trading 💧

Liquidity isn’t just a buzzword – it’s one of the most critical concepts in crypto trading. Here's what you need to know:

🔹 What is Liquidity?

It’s how easily you can buy or sell an asset without drastically moving the price.

🔸 High Liquidity =

✅ Tight spreads

✅ Fast execution

✅ Less slippage

✅ Better for large trades

🔸 Low Liquidity =

⚠️ Wide spreads

⚠️ More slippage

⚠️ Difficulty entering/exiting positions

📊 Why It Matters:

Scalping & Day Trading? You NEED high liquidity.

Altcoins or low-cap tokens? Be extra careful – poor liquidity can wreck your exit.

DEX vs. CEX: Liquidity is often deeper on major CEXs, while DEXs rely on pools (and may suffer on large orders).

💡 Tip: Always check the order book or liquidity pool before placing a large trade. And if you’re using leverage, liquidity can make or break your position.