#Liquidity101

Here’s a clear guide #Liquidity101 — what liquidity is in the world of trading and crypto:

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💧 What is liquidity?

Liquidity is how easily and quickly an asset can be bought or sold without significantly changing its price.

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🟢 High liquidity

Many buyers and sellers

The spread (the difference between the buying and selling price) is small

Transactions happen quickly and at fair prices

Example: BTC/USDT on Binance

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🔴 Low liquidity

Few market participants

Large spread

Price can jump sharply during a large transaction

Example: New token on DEX without volume

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💡 Why is this important:

For traders: low liquidity = slippage risk (you bought/sold at a worse price)

For projects: without liquidity — the token is “dead”

For investors: you can lose