#Liquidity101 Liquidity 101 – Why It Matters in Crypto 🌊

Liquidity means how easily an asset can be bought or sold without impacting its price. It’s one of the most important factors in trading, investing, and DeFi.

🔹 High Liquidity = Smooth trading

✅ Low slippage

✅ Faster transactions

✅ Tighter spreads

🔹 Low Liquidity = Risky trading

⚠️ Big price swings

⚠️ Difficult to enter/exit positions

⚠️ Higher chance of manipulation

In centralized exchanges (CEX), liquidity is usually provided by market makers.

In decentralized exchanges (DEX), it comes from liquidity pools — where users lock tokens to earn fees.

💡 Tip: Always check a token’s liquidity before trading. High volume doesn’t always mean high liquidity!

Whether you’re trading BTC or farming DeFi tokens, liquidity can make or break your trade.

More liquidity = more confidence.

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