#Liquidity101

Liquidity is a key concept in trading that refers to how quickly and easily an asset can be bought or sold without affecting its price. In markets with high liquidity, such as BTC/USDT, there are plenty of buyers and sellers, which means faster trades and tighter spreads. On the other hand, low-liquidity assets may have large price swings and delays in order execution. Liquidity is also important for risk management—traders prefer liquid markets to avoid slippage. In decentralized exchanges, liquidity is often provided by users through liquidity pools, which also allows them to earn passive income from trading fees.