#Liquidity101 #Liquidity101 💧 Understanding Liquidity in Crypto
What is Liquidity?
It’s how easily you can buy or sell an asset without affecting its price too much.
🔎 Simple breakdown:
High liquidity = Many buyers & sellers = Smooth trades
Low liquidity = Few participants = Wild price swings
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💠 Why Liquidity Matters:
✅ Tighter spreads – You get more competitive pricing
✅ Faster execution – Trades complete quickly
✅ Less slippage – Your price stays close to what you expect
✅ More stability – Harder to manipulate prices
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🧠 Quick Tips:
• 🪙 Large caps like BTC, ETH = high liquidity
• 🧪 New or low-cap tokens = typically low liquidity
• 🔄 DEXs use liquidity pools instead of order books
💡 Always check liquidity before trading — especially on lesser-known tokens.
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