#Liquidity101

💧 #Liquidity101 | What is liquidity in the trading world? 🤔

Liquidity = The ease of buying or selling an asset without significantly affecting the price.

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📊 Why is liquidity important?

✅ Faster order execution

✅ Lower spreads

✅ Less price volatility

✅ More stable trading experience

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🟢 High liquidity market:

A large number of buyers and sellers

Trades executed quickly at a fair price

🔴 Low liquidity market:

Difficulty in executing large trades

Wider price spreads

Sudden fluctuations

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💡 Simple example: Buying BTC for $1000 in a high liquidity market = quick execution and a price close to the market.

In a low liquidity market? You might wait or get an unfavorable price.