#Liquidity101

💧 #Liquidity101: What Is Liquidity in Crypto (and Why It Matters)?

Liquidity = how easily you can buy or sell an asset without causing big price swings.

📈 High Liquidity

✅ Tighter spreads (better prices)

✅ Faster trades

✅ Less volatility

✅ Found on major tokens like BTC, ETH and big CEXs/DEXs

📉 Low Liquidity

⚠️ Bigger price slippage

⚠️ Harder to enter or exit positions

⚠️ Often in smaller-cap coins or new tokens

🔁 Think of liquidity like water in a pool:

🏊 More water = easier to dive in and out.

🥄 Less water = risky to jump—could hurt!

🧠 Tip for Traders:

Always check liquidity before trading, especially with altcoins on DEXs. Big price moves on low liquidity can wipe out gains—or worse.

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