#Liquidity101 Liquidity in cryptocurrencies refers to the ease of buying or selling an asset without significantly affecting its price. High liquidity means smoother and faster transactions with lower spreads. For example, a major currency like Bitcoin has high liquidity, which enhances trading efficiency. On the other hand, lesser-known currencies may suffer from low liquidity, resulting in slippage or price volatility during trading. Binance provides various tools such as liquidity pools and advanced matching engines to ensure smooth trading. Understanding liquidity is essential for every trader, especially when dealing with high-volatility assets. With good liquidity, markets remain strong and investor confidence grows.
