#Liquidity101

What is Liquidity in Crypto?

Liquidity is how easily and quickly you can buy or sell a crypto coin without causing its price to change significantly.

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🧃 Analogy: Liquidity Is Like Selling Iced Tea at the Market

Imagine you are selling sweet iced tea at the market.

If many people want to buy your iced tea, and there are also many selling iced tea, then you can:

Easily sell iced tea

Buy iced tea anytime

Price remains stable, for example, Rp5,000 per glass

That is called: high liquidity.

👉 Easy to sell/buy, stable price.

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But if you are at a quiet market...

Only a few people want to buy or sell iced tea

If you want to sell, you have to wait a long time

Or you have to lower the price so that someone will buy

That is called: low liquidity.

👉 Hard to sell/buy, price can fluctuate sharply.

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💰 Example in the Crypto World

For example, you have a coin called "Coin ABC":

In the exchange (place for buying and selling crypto), if many people are actively buying and selling Coin ABC, then:

You can sell your coin immediately and get money

No need to wait long

Doesn't crash the price

But if there is almost no one selling or buying, you:

Have to wait

Or you have to sell cheaper

Prices can become strange

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🧠 The Bottom Line:

> High liquidity = like a crowded market

Low liquidity = like a quiet market