#Liquidity101

Liquidity in the cryptocurrency market refers to the ease of buying or selling an asset without significantly affecting its price. A highly liquid market provides faster execution of trades and lower price differences (spread). Liquidity depends on trading volume and the number of participants in the market. Assets with high liquidity are safer to trade, while low liquidity assets can cause sharp fluctuations and difficulty in exiting a trade. Major platforms typically provide better liquidity. Understanding liquidity is important for assessing risks and determining the right timing to enter or exit the market. Liquidity is a key indicator of market health and stability.