#Liquidity101

Important Note on #Liquidity101

Liquidity is the lifeblood of any trading market, especially in crypto. It refers to how easily a coin or token can be bought or sold without affecting its price. High liquidity—common in pairs like BTC/USDT—means tighter spreads, faster trades, and less slippage. Low liquidity, however, often leads to higher volatility and difficulty executing large trades. With the shift toward decentralized finance, understanding liquidity on both CEXs and DEXs is critical. DEXs rely on liquidity pools, where users provide funds to earn fees, but they’re more sensitive to large trades and price impact. Official platforms are stressing the importance of transparency in liquidity metrics to avoid manipulation and rug pulls. Before trading or investing, always check a pair’s 24h volume and order book depth. Smart traders don’t just look at price—they look at liquidity first.

Know the flow. Trade smart. Stay safe