#Liquidity101 Understanding liquidity is essential in crypto and traditional finance alike. Here's a quick breakdown:

🔹 What is Liquidity?

It refers to how easily an asset can be bought or sold without significantly affecting its price. The higher the liquidity, the smoother the trade.

🔹 High Liquidity = Tight spreads, fast execution, stable prices.

🔹 Low Liquidity = Bigger spreads, price slippage, higher volatility.

In crypto, liquidity is affected by:

Exchange volume

Market makers

Token supply

Investor interest

External events (like Ripple’s delayed XRP unlock)

💡 Why it matters:

Whether you're a day trader or long-term holder, liquidity determines how efficiently you can enter and exit positions — and at what cost.