#Liquidity101

Why is liquidity important in the cryptocurrency market?

Let's take a closer look at the reasons why liquidity is essential in the cryptocurrency market. Here's what it does:

It maintains price stability

A liquid market is characterized by high trading activity, which brings balance between supply and demand. Thus, sharp price fluctuations are reduced.

It clarifies price determination

Thanks to stability, a liquid market provides the most accurate valuation. This helps in planning your personal investment strategy.

It prevents price manipulation

A liquid market is less susceptible to price control and manipulation by unscrupulous participants. This increases security when participating in the market.

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