#Liquidity101

**Liquidity 101: Market Smoothness**

Liquidity measures how easily you can buy/sell an asset **without** drastically moving its price.

* **High Liquidity (e.g., BTC/USDT on Binance):**

* **Tight Spreads:** Small difference between highest bid & lowest ask prices.

* **Deep Order Book:** Large volume of buy/sell orders at various prices.

* **Fast Execution:** Orders fill quickly near expected prices (low slippage).

* **Low Liquidity (e.g., new Altcoins/BSC tokens):**

* **Wide Spreads:** Large bid/ask gap.

* **Shallow Order Book:** Few orders; your trade can move the price significantly.

* **High Slippage:** Actual execution price can be much worse than expected.

**Why it matters on Binance:** High liquidity = efficient trading. Low liquidity = higher risk and cost. **Always check order book depth before trading!**