#Liquidity101
๐ง Liquidity 101: What Every Crypto Trader Should Know
Liquidity is the lifeblood of any marketโespecially in crypto! Here's a quick crash course:
What is Liquidity?
Liquidity refers to how easily you can buy or sell an asset without affecting its price.
High liquidity = fast trades, low slippage.
Low liquidity = slow trades, big price swings.
Why It Matters:
โ Faster transactions
โ Tighter spreads (better prices!)
โ Lower risk of price manipulation
โ More reliable price discovery
High vs. Low Liquidity Coins:
๐ฐ BTC & ETH = High liquidity (easy to trade anytime)
๐ฑ Small-cap tokens = Often low liquidity (can pump or dump quickly!)
๐ก Pro Tip: Only invest what you can afford to lose and be cautious with low-liquidity coinsโthey can be volatile!
