#Liquidity101

What does liquidity mean in the crypto world?

🔹 Liquidity = The ease of buying or selling an asset (cryptocurrency) without significantly affecting its price.

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📈 High liquidity:

✅ There are many buy and sell orders

✅ The difference between the buying and selling price (Spread) is small

✅ Fast execution and lower volatility

🔸 Example: Bitcoin on a large platform like Binance or OKX

📉 Low liquidity:

⚠️ Difficulty in executing large trades

⚠️ High volatility

⚠️ The difference between the buying and selling price is large

🔸 Example: Small or new coins without sufficient trading volume

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💡 Why is liquidity important?

It reduces the likelihood of unexpected losses due to price differences

It facilitates entering and exiting trades

A sign of the strength of the project or platform

🛑 Tip: Before you enter any coin, check the daily trading volume and liquidity… because you might buy, but not know how to sell!