#Liquidity101 Liquidity refers to how quickly and easily an asset can be bought or sold without affecting its price. Highly liquid markets like BTC or ETH allow for fast trades with minimal slippage. On the other hand, low liquidity assets may lead to price fluctuations when traded in large amounts. Liquidity is important because it affects entry and exit timing, spreads, and trading volume. Traders prefer high liquidity assets because they offer better price stability and faster execution. Always check the order book and volume before making a trade to assess liquidity.