#liquidity101 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, resulting in tighter spreads, faster trades, and more stable prices—common in popular assets like Bitcoin or major stocks. Low liquidity can cause price slippage and delays in trade execution. Liquidity is crucial for traders and investors as it impacts risk, cost, and market efficiency. Centralized exchanges usually offer higher liquidity due to large user bases, while some decentralized platforms may have lower liquidity. Understanding liquidity helps in making smarter trading decisions.