#Liquidity101 is the basis for understanding liquidity in financial markets. Liquidity is the ability of an asset to be quickly sold or bought without significant impact on its price. Highly liquid markets (for example, Bitcoin or stocks of large companies) have many buyers and sellers, providing stability and a smaller spread. Low liquidity can lead to sharp price fluctuations and difficulties in executing orders. In DEX, liquidity is often supported by pools (AMM), while in CEX, it is provided by deep order books.