#Liquidity101

Liquidity refers to how easily an asset can be bought or sold without affecting its price. High liquidity means quick trades with minimal price changes—common in popular markets like BTC or ETH. Low liquidity can lead to price slippage and delays. In crypto, centralized exchanges usually offer higher liquidity due to more users and market makers, while decentralized exchanges depend on liquidity pools funded by users. Good liquidity is crucial for efficient trading, tighter spreads, and price stability. Traders and investors should always consider liquidity when entering or exiting positions to avoid unexpected losses or delays.