#Liquidity101

#Liquidity101: Liquidity refers to how easily an asset can be bought or sold without affecting its price. In crypto and traditional markets, high liquidity means there are many buyers and sellers, making trades fast and efficient with minimal slippage. Low liquidity can lead to price volatility and difficulty executing large orders. Exchanges with deeper liquidity offer better stability and tighter spreads. Market makers and trading volume play a key role in maintaining liquidity. For traders and investors, high liquidity is crucial for entering and exiting positions smoothly. Always consider an asset’s or platform’s liquidity before trading—it can significantly impact your risk, pricing, and overall strategy in any market environment.