#Liquidity101

Liquidity in the cryptocurrency market is the ability of an asset (such as Bitcoin or a token) to be quickly sold or purchased without significantly impacting its price. 

Key aspects of liquidity

1. Market depth – the presence of a large number of buy and sell orders (order book). 

2. Trading volume – the higher the turnover of an asset, the easier it is to exchange without slippage. 

3. Spread (the difference between buying and selling price) – liquid assets have minimal spread. 

4. Number of trading pairs – if a token is traded on many exchanges and against different currencies (USDT, BTC, ETH), its liquidity is higher. 

Examples:

1. Highly liquid assets: BTC, ETH, USDT, BNB – they can be easily bought/sold at any moment. 

2. Low liquidity assets: lesser-known altcoins – with a large transaction, the price can change sharply.