#Liquidity101

Liquidity is the lifeblood of any financial market. It refers to how easily an asset can be bought or sold without affecting its price. High liquidity means there are lots of buyers and sellers, making trades smooth and prices stable. Low liquidity can cause price swings and make it harder to execute trades quickly. In crypto markets, liquidity plays a critical role because it impacts your ability to enter or exit positions at favorable prices. Exchanges with high liquidity tend to have tighter spreads (the difference between buy and sell prices), reducing trading costs. For traders and investors, understanding liquidity helps in picking the right markets and avoiding slippage — when your trade executes at a worse price than expected. Always check the liquidity of trading pairs before diving in, especially in volatile markets. Remember, liquidity keeps markets healthy and accessible for everyone!