#Liquidity101
Liquidity refers to how easily a crypto asset can be bought or sold without causing a big price change. High liquidity means many buyers and sellers are active, making trades smoother and faster. Popular tokens and large exchanges usually have high liquidity. Low liquidity can lead to slippage, where the price changes before your order is filled. This can be risky, especially for large trades. Always check liquidity before entering or exiting a position, especially when dealing with small-cap or new tokens. It’s a key factor in secure and efficient trading.
