#Liquidity101

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*#Liquidity101*

Liquidity in crypto trading refers to how easily an asset can be bought or sold without affecting its price. High liquidity means there are many buyers and sellers in the market, resulting in faster transactions and tighter spreads. Bitcoin (BTC) and Ethereum (ETH) are examples of high-liquidity assets due to their high trading volumes. On the other hand, low-liquidity assets can be difficult to trade, often resulting in price slippage and delays in execution. Liquidity is important because it affects your ability to enter and exit positions efficiently. Exchanges also play a role—centralized exchanges typically offer higher liquidity than decentralized ones. Traders prefer liquid markets to avoid unexpected losses and to have better control over trade execution. Monitoring liquidity can help you decide when and where to trade a specific coin. Always consider liquidity before placing large trades or using leverage.

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