#Liquidity101

Liquidity refers to how easily an asset can be bought or sold in a market without significantly affecting its price. In cryptocurrency, high liquidity means there are many buyers and sellers, allowing trades to happen quickly and at stable prices. Low liquidity can lead to large price swings and difficulty executing trades at desired prices. Liquidity is crucial for traders and investors because it impacts entry and exit efficiency. Factors that affect liquidity include trading volume, number of market participants, exchange reputation, and the popularity of the asset. High liquidity is typically seen in major coins like Bitcoin and Ethereum.