#Liquidity101 #Liquidity101 💧📈

"Liquidity" is one of the most important concepts in the world of trading and investing, but is often overlooked by beginners. Let's break it down from the basics!

💡 What Is Liquidity?

Liquidity = How easily and quickly you can buy/sell an asset without significantly changing its price.

📊 Simple Example:

High Liquidity:

Many buyers and sellers → fast transactions → tight spread (small buy/sell difference).

🟢 Example: BTC, ETH on Binance.

Low Liquidity:

Few buyers/sellers → slow or difficult transactions → wide spread → high potential for slippage.

🔴 Example: New tokens on small DEX.

🔍 Signs of a Liquid Market:

High trading volume

Thick order book (many orders at various price levels)

Narrow spread between bid and ask prices

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