#Liquidity101

Liquidity refers to how easily you can buy or sell a crypto asset without affecting its price. High liquidity means there are lots of buyers and sellers, so trades happen quickly and at stable prices. This is common in major tokens like BTC or ETH. Low liquidity means fewer participants, which can cause price slippage and delays. Liquidity is crucial for traders because it affects how fast and efficiently they can enter or exit positions. Centralized exchanges usually offer higher liquidity due to larger user bases, while DEXs rely on liquidity pools. Always check liquidity before trading—especially with smaller altcoins.