$BTC Role & Impact:

Liquidity determines how easily assets can be bought/sold without price disruption.

High liquidity enables faster execution, tighter spreads, and minimal slippage. Low liquidity causes delays, wider spreads, and significant price slippage—especially on large orders.

Evaluation Before Trading:

1. Volume: Check 24h trading volume (higher = better liquidity).

2. Order Book Depth: Analyze bids/asks close to mid-price.

3. Spread: Narrow spread = healthy liquidity.

Slippage Reduction Strategies:

- Use limit orders (not market orders).

- Split large orders into smaller chunks.

- Trade during peak activity hours.

- Prioritize high-liquidity pairs (e.g., BTC/USDT).

Pro tip: On CEXs