#Liquidity101
Understanding Liquidity in Crypto Trading
Liquidity in crypto trading refers to how easily an asset can be bought or sold without affecting its price. High liquidity means many buyers and sellers are available, allowing fast and smooth transactions. Assets like Bitcoin and Ethereum have high liquidity, making them ideal for trading.
Low liquidity, on the other hand, can cause price slippage, delays, and difficulty exiting trades. It’s risky, especially for beginners or small-cap coins.
Why Liquidity Matters:
1. Easier to enter and exit positions.
2. Lower risk of price manipulation.
3. More accurate price reflection.
Tip: Always trade assets with high daily volume to ensure strong liquidity and better trading safety.
