#Liquidity101 Have you ever tried to buy a token and noticed that the price suddenly "jumped"?
Or tried to sell and couldn't find a buyer?
This has everything to do with liquidity, and understanding this concept is fundamental for any crypto investor. 👇
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💧 What is liquidity?
Liquidity is the ease of buying or selling an asset without significantly changing the price.
The higher the liquidity, the faster and closer to the fair value you can trade.
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📈 High liquidity:
Many buyers and sellers
Stable price
Orders executed quickly
Ex: BTC, ETH on large exchanges
📉 Low liquidity:
Few participants in the market
Higher slippage
Difficult to enter or exit a large position
Ex: small tokens or on less-used networks
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🏦 Where does liquidity come in?
CEX: Liquidity provided by order books and market makers
DEX: Liquidity comes from pools (LPs), where users deposit tokens to facilitate trades
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🔍 Why does this matter?
The higher the liquidity, the lower the risk of overpaying or selling cheaply
Tokens with low liquidity may seem promising but are harder to trade without losses
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✅ Tip: Always check the liquidity before investing, especially in altcoins or newly launched tokens.
Have you ever had issues with slippage or lack of liquidity? Share your experience here!
🟡 Follow my profile for more clear explanations about the crypto world
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Hashtags:
#Liquidity101 #Cryptocurrencies #DEX #CEX #BinanceSquare #CryptoEducation #Altcoins
