#Liquidity101

Liquidity101: Why It Matters in Crypto Trading

Liquidity is one of the most important—but often overlooked—concepts in crypto. It refers to how easily an asset can be bought or sold without causing a major price change.

🔹 High liquidity = faster trades, tighter spreads, better prices.

🔹 Low liquidity = higher slippage, slower execution, more volatility.

Centralized exchanges (CEXs) typically offer higher liquidity due to large user bases and order books. Decentralized exchanges (DEXs) rely on liquidity pools, where users provide assets in exchange for rewards.

Whether you're day trading or holding, understanding liquidity helps you trade smarter and avoid surprises.